Analysts: NSN's focus on mobile broadband smart move
Nokia Siemens Networks' plan to solely focus on the mobile broadband market is receiving kudos from industry analysts.
Last week NSN announced it would eliminate 17,000 positions by 2013 for a total cost savings of $1.3 billion. The company said the action will include the "elimination of the company's matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola's wireless assets, efficiencies in service operations, and company-wide process simplification."
NSN closed on its $975 million acquisition of Motorola's networking business in August. The net result of the moves: NSN will become a smaller, more nimble company with lower costs and a sharper focus on fewer product lines.
"The fact that NSN is now acutely focused on mobile broadband and services (including customer experience management and optical products tied to mobile broadband) is not coincidental, as they're all areas of strong expertise and market success for NSN - not to mention areas where there is still market opportunity left to be tapped," noted Current Analysis analysts Peter Jarich and Erik Keith in a research note. "While undoubtedly a difficult decision, which NSN came to after exploring a broad range of alternatives over the past several years, the company has nevertheless taken a vital step forward to ensure its long-term viability as a Tier 1 vendor within the overall service provider infrastructure market."
Heavy Analyst Gabriel Brown said that NSN's focus is not surprising an that "on balance, operators would prefer to see a focused, sustainable mobile broadband business, than a loss-making integrated vendor."
NSN has been moving toward becoming a mobile broadband-only vendor via its new base-station and network architecture concepts. In September, the vendor introduced Liquid Net, a network concept designed to turn a traditional mobile network into software-driven network capable of self adapting to network loads. In February, NSN introduced its Liquid Radio base stations that uses distributed antennae and virtualized baseband processing to provide a highly distributed architecture built around small cells and miniature base-station designs.
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