Rumor mill: NSN selling Business Support Services unit

Nokia Siemens Networks is close to selling its business support systems division, according to a Bloomberg article.

The BSS unit could attract up to $377 million, reported Bloomberg, citing sources with knowledge of the matter. Potential buyers include Ericsson (NASDAQ:ERIC), Amdocs and private-equity firms.

NSN's BSS unit provides telecommunications carriers with services such as converged charging and billing, mediation and service brokering. The company's website says its BSS unit has more than 300 operator customers globally as well as 555 million subscribers on its charging system and in excess of 140 convergent mediation customers globally.

When asked to comment on the rumored sale negotiations, an NSN spokeswoman referred FierceBroadbandWireless to NSN spokesman Ben Hunt's email response in the Bloomberg article.

"As we announced in November, Nokia Siemens Networks believes that the future of our industry is in mobile broadband, and we are intensifying our strategic focus on that area," Hunt said. "Business areas not consistent with the new strategy are planned to be divested or managed for value, and we have already announced the divestment of a number of these business."

NSN announced earlier this week that it is opening a 4G network gear assembly line in Brazil with contract manufacturer Flextronics International. Shipments from the plant should begin in early October, Ken Wirth, head of the Americas region for NSN, told Reuters.

Brazil's recently concluded 4G spectrum auction required licensees to include at least 60 percent Brazilian content in their network hardware. NSN signed 4G contracts with a Brazilian carrier and a Chilean carrier that Wirth declined to identify to Reuters. The rapidly growing Americas region already contributes 13 percent of the NSN's revenue, which is more than more than North America contributes.

NSN, the network-equipment venture of Nokia (NYSE:NOK) and Siemens, reported an operating loss of $278.3 million for 2012's second quarter, wider than the operating loss of $136 million it had in the year-ago period, though the company noted that because it completed the acquisition of Motorola Solutions' (NYSE:MSI) networks business on April 30, 2011, its second-quarter results were not directly comparable to last year.

Overall, the company's quarterly sales dipped 8 percent year-over-year to around $4.1 billion. NSN reported year-over-year drops in sales in every region except Asia-Pacific.

The vendor is undergoing a major restructuring to focus on mobile broadband and plans to have slashed up to 17,000 jobs by the end of 2013 to save $1.3 billion. As part of its restructuring, NSN this year sold its microwave transport business to DragonWave, its fixed line broadband access business to Adtran and its WiMAX business to NewNet Communication Technologies.

Declining demand is impacting all players in the infrastructure industry, even leading Chinese vendors Huawei and ZTE, which have often been faulted for offering rock-bottom project bids that lowered infrastructure prices industry-wide. Both of those firms have been trying to diversify beyond traditional infrastructure offers and have seen their bottom lines bolstered by their growing handset units. Yet ZTE reported a 68 percent plunge in first-half net profit, while Huawei reported that its operating profit for the first half of this year fell 22 percent.

Also during the second quarter, Ericsson (NASDAQ:ERIC) saw its net income fall 63 percent. Alcatel-Lucent (NASDAQ: ALU) reported a net loss of $312.5 million for the quarter compared to a profit of around $53 million in the year-ago period.

For more:
- see this Bloomberg article
- see this Reuters article

Related articles:
ZTE's first-half profit slumps 68% amid weaker gear market
Huawei posts 22% decline in first-half operating profit
NSN sees Q2 sales drop 8%, continues with restructuring plan
Alcatel-Lucent to cut 5,000 jobs as part of new restructuring plan
Network infrastructure vendors face tough Q2, road ahead
Ericsson's Q2 profit drops 63% on weaker network sales
Alcatel-Lucent to post Q2 operating loss, will miss annual profit goal
NSN: Rivals will also have to refocus, cut back

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