Nokia Siemens Networks (NSN) is still undergoing a deep restructuring, says Nokia's CEO Stephan Elop, adding: "we continue to pursue all options as we go forward," he told investors on the company's earnings conference call last week.
While not willing to elaborate on what the future might hold for NSN in terms of structure or ownership, Elop says he is now turning his attention to rejuvenating the infrastructure manufacturer after the company reported a fall in sales of 7 per cent, with an adjusted operating loss of 5 per cent for its first quarter.
NSN recorded an operating loss of €1.05 billion in the first quarter, though the company noted that because it completed the acquisition of Motorola Solutions' networks business on April 30, 2011, its first-quarter results are not directly comparable to last year.
However, Nokia expects NSN's non-IFRS operating margin to "clearly" improve in the second quarter compared to the previous quarter, but hedged this positive forecast, claiming that the timing of any improvements was uncertain due to the nature of the restructuring programme as well as ongoing uncertain macroeconomic conditions.
The network infrastructure vendor is undergoing a major restructuring to focus on mobile broadband and plans to slash up to 17,000 jobs by the end of 2013 to save € 1 billion.
This upbeat assessment was treated cautiously by WestLB analyst Thomas Langer. "Whether the rest of the year will become acceptable for NSN is written in the stars," he told Bloomberg. Nokia Siemens "has to show in coming quarters that it can attain a margin of more than 5 per cent. As long as they can't show that it will remain a ball and chain for Nokia."
Adding insight into the progress being made by NSN, Michael Soper, a networking and mobility research analyst for TBR, said the company was ahead of schedule with its restructuring, as seen with its push to shift costly units, such as R&D, to India and the Philippines. Having now gained a foothold in the US market, TBR believes that NSN will actively promote its small cell technology among tier 1 operators, and hope to gain LTE equipment orders from T-Mobile USA, an existing customer.
Soper also maintains that, once NSN releases details of technology updates to its BBS platform--due later this month--it will push ahead with offloading the unit, which is seen as an attractive acquisition target for telecom software providers, but a non-core asset to NSN.
- see this Nokia release
- see this Bloomberg article
- see this TBR release
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