Nokia Siemens Networks (NSN) continues to bleed red ink as network service providers keep their wallets in their pockets.
The vendor has reported Q2 sales of €3.19 billion, down 21% year-on-year, and although it is up 7% on the last quarter, the vendor trimmed its forecast for the year.
Nokia CEO Olli-Pekka Kallasvuo said NSN believed its market share would decline moderately in 2009 compared to 2008. Previously the company expected market share would be flat.
Kallasvuo said NSN was the victim of additional competitive pressures, in particular losing wireless infrastructure market share to other vendors.
According to the Dell’Oro Group, in 2006 NSN held a 25.1% market share which last year slipped to 24.1%.
This year, its operating loss widened from €47 million to €188 million, with significant sales declines in every region except North America. Its operating margin shrank from –1.2% to –5.9%.
Despite a slew of recent contract wins, North America is still NSN’s smallest market, reporting €294 million for the quarter which could not offset the declines in its core Europe and Asia-Pacific regions.
Sales also declined across its infrastructure divisions, while some growth was experienced in the radio access business, where HSPA upgrades drove revenue.
Kallasvuo said that both Nokia and Nokia Siemens Networks “continue to expect the mobile infrastructure and fixed infrastructure and related services market to decline approximately 10% in €terms in 2009, from 2008 levels.”
The vendor’s services business unit was the strongest performer bolstered by accompanying news that NSN had secured a €1.1 billion five-year managed services deal with Brazilian operator Oi. But the strong performance in services is expected to be offset by declines in certain product lines.
