Nokia has announced a major sales push for its infrastructure division, Nokia Solutions and Networks (NSN), in the second half of 2014, although weak spending by European telecoms operators makes it unlikely that growth will come from its core European markets.
The vendor announced plans for the sales campaign after revealing that sales at NSN fell 22 per cent year-on-year to €3.1 billion ($4.23 billion) in the fourth quarter of 2013. However, the business maintained its run of profitability with a profit of €15 million in the period, compared to a loss of €1.4 billion in the fourth quarter of 2012.
Analysts focused on NSN's fourth-quarter results because the business is set to become Nokia's core division in the current quarter, when the sale of its devices business to Microsoft is completed. However, one analyst told Reuters the planned sales push is welcome, because the vendor needs to begin driving profitability through new orders rather than cost cutting.
"They have cut costs and made profits for several quarters, but it's important that sales will stabilise and grow in the second half of this year," Greger Johansson, an analyst at research firm Redeye, told Reuters.
Nokia predicted NSN's full-year 2013 profit margin will fall in the higher end of a 5 per cent to 10 per cent range, which is in line with analyst forecasts, Bloomberg reported.
NSN ceded the No. 3 spot in the global RAN market to Alcatel-Lucent in the third quarter of 2013, ABI Research reported.
While Nokia said nothing about its post-devices structure in its fourth-quarter results statement, the vendor is racking up wins in overseas markets including Asia Pacific and Middle East and Africa.
The regions present more opportunities, with LTE rollouts at an early stage relative to NSN's domestic European market, and little growth predicted in the U.S., where ABI Research said in November LTE spending was reaching its peak.
NSN's recent moves back the view it will focus on emerging markets for future growth. Chief executive Rajeev Suri met China's vice premier, Wang Yang, in Beijing to discuss potential technology collaborations early January, and the vendor has secured TD-LTE rollout deals with domestic operators China Mobile and China Telecom.
This week, NSN revealed its eleventh contract in the Middle East, with a deal to upgrade Saudi Arabian carrier Mobily's 2G, 3G, and TD-LTE networks.
An NSN spokesperson told Fierce Wireless:Europe the vendor had also won contracts with operators including Saudi Telecom Company (STC), Zain Saudi and Bahrain, Ooredoo in Qatar, Vodacom South Africa, and Alfa Lebanon.
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