Nokia Siemens eyes U.S. as key market in turnaround

Nokia Siemens Networks CEO Rajeev Suri said the United States will be a critical market for the vendor as it continues to transform its operations to focus on mobile broadband.

In an interview with Bloomberg, Suri said the company is looking less at deals in the Middle East and Africa and more at the U.S. as carriers expand and upgrade their networks to handle more data traffic. "The industry is a tough place," Suri said. "The U.S. is certainly an opportunity so we'll be there."

Nokia Siemens was buoyed in the third quarter by a strong performance from the Asia-Pacific region en route to a record profit. However, sales in North America slumped 6 percent, something the company is hoping to rectify through increased marketing and rising data demand.

"Our strategy was to go for Korea, Japan and the U.S. because that is where operators are monetizing data," Suri said. "It was about withdrawing from some markets in the Middle East and Africa where it's hard to make money and the rest of the world we would defend and not grow. What we saw in the third quarter was that the strategy is working."

The focus on the U.S. is not really a surprise, since it is the leading market in terms of LTE coverage and subscribers. Along with Ericsson (NASDAQ:ERIC), NSN won a contract in May from T-Mobile USA to upgrade its network and deploy LTE.

NSN's push to grab more market share comes as Huawei and ZTE continue to face difficulties in cracking the U.S. infrastructure market because of concerns in the U.S. government that they pose a security risk. Additionally, Alcatel-Lucent (NASDAQ: ALU), while still strong in the U.S., is facing its own financial concerns as it seeks to sell assets to bolster its balance sheet.

"The competitive environment within the mobile-equipment industry has changed in favor of NSN," Sami Sarkamies, a Nordea Bank analyst in Helsinki, told Bloomberg. "It looks like the Chinese vendors will be kept out of the U.S., while NSN's improving profitability makes it a more compelling partner than Alcatel- Lucent, which is struggling."

Research firm Dell'Oro said earlier this month that Nokia Siemens saw its overall market share rise from 18 percent to 20 percent in the third quarter. Market leader Ericsson slipped from 35.5 percent to 34 percent while No. 2 Huawei maintained its market share at 22 percent, according to Dell'Oro. Interestingly, Dell'Oro also estimated that Nokia Siemens overtook Alcatel-Lucent as the No. 2 LTE vendor in the world by revenue in the third quarter, a reversal from the second quarter when Ericsson and Alcatel-Lucent led the LTE market.

For more:
- see this Bloomberg article

Related Articles:
Nokia Siemens' market share jumps from 18 to 20% in Q3, Dell'Oro finds
Nokia Siemens gets boost from Asia-Pacific in strong Q3
Ericsson posts 43% slump in Q3 profit, despite strong North American sales
Alcatel-Lucent posts Q3 loss, considers unspecified asset sales to boost finances
Dell'Oro: Ericsson, Alcatel-Lucent lead surging LTE gear market