Feeds

Buh-bye Siemens: Nokia to splash €1.7bn turning NSN into N

Co-owned infrastructure biz actually makes money

Eight steps to building an HP BladeSystem

Nokia is buying out its network partner Siemens, for €1.2bn in cash plus a half-a-billion loan, putting the Finnish firm in sole control of the infrastructure business.

Ownership of Nokia Siemens Networks (NSN) is split equally between the companies, and managed to turn a thin profit last year following repeated rounds of cost-cutting.

Nokia will leave management - and staff - intact and won't be slimming the business down beyond the existing plans, but it will take complete control once the transaction has completed.

NSN was set up in 2007 to help both companies compete in an increasingly commoditising market, but such arrangements are inevitably fissiparous as market conditions change.

In recent years Chinese competitors Huawei and ZTE have undercut the relaxed infrastructure oligopoly, flooding expansion markets such as Africa and India with kit priced suspiciously below what established players can offer.

Nokia's skill with radio is unmatched, in your correspondent's humble opinion, but that hasn't helped it compete with the iPhone in the mobile business. So the commoditisation of network components has made it difficult to differentiate.

The solution is to focus on cutting-edge technology, serving markets prepared to pay a premium for experience. Or, as CEO Stephen Elop puts it: "Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity".

Nokia has plenty of cash to buy out Siemens. At the end of March there was €10.1bn in readies knocking about, and €4.5bn of that isn't earmarked for anything important, so the time is right.

Those numbers are trending downwards, as the company waits for its gamble on Windows Phone to pay off, but if NSN can be kept in profit then it might even give Nokia a little more time at the table. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Orange spent weekend spamming customers with TXTs
Zero, not infinity, is the Magic Number customers want
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup
Just hook us up to more 10Gbps ports, backbone biz yells in tit-for-tat spat
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.