Are Siemens and Nokia look for a way out of their infrastructure JV?

Losing Nortel's CDMA and LTE assets to Ericsson was a major blow to Nokia Siemens Networks and now it is struggling financially and losing ground to major competitors such as Ericsson and Huawei. Things have gotten so bad that the Financial Times Germany is reporting that both Siemens and Nokia are searching for a way out of the venture.

In the third quarter, Nokia's bottom line took a major hit from a $1.35 billion goodwill write down of NSN. "The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks," Nokia CEO Olli-Pekka Kallasvuo said in a statement. "We continue to support Nokia Siemens Networks actions to improve its performance."

It appears the options for NSN are few. Analysts say that floating the company would have to be at a deep discount because of its loss making and declining market share. The notion of Nokia taking full control has been dismissed given that the Finnish company has sufficient strategic issues to resolve without the mountain of troubles that would come with acquiring NSN.

Adding further woes, a new report from Infonetics claims that Huawei is dramatically improving its global image, having good technology and offering strong value for money. Stéphane Téral of Infonetics said: "Huawei is overtaking Alcatel-Lucent on many fronts, and is now en route to attacking NSN's market position in the mobile infrastructure space. And watch out, because another Chinese telco equipment maker ZTE is on the rise as well."

For more:
- check out this Rethink Wireless article
- see this Reuters article
- take a look at this Xchange article

Related articles:
Nokia shocks market, posts $834M loss
Only room for three infrastructure vendors, claims incoming NSN boss
LTE: NSN claims first call made using commercial software
Nokia, Siemens search for exit out of NSN venture
NSN signs 3G networking deal, and aims for 10% profit margin


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