Nokia Siemens Networks get going amid reduced market expectations

print this

Nokia Siemens Networks (NSN), a new company set up through the merger of the mobile telephone network divisions of Nokia and Siemens, could have had a brighter start to its operation. The company - which officially commenced its activities on Monday - announced off-hand that it had lowered its expectations regarding the growth potential of the networks market.
      "We were looking forward to slight growth, we are now expecting very slight growth. We have received signals from some areas and operators that have added to our cautiousness", said Simon Beresford-Wylie, CEO of NSN, at a press conference. The briefing was organised right after the Monday morning official opening ceremony of the new company, in its brand new headquarters in Espoo's Karakallio district.
     
Already in June of last year, in connection with the announcement of the merger, Beresford-Wylie promised annual cost synergies of EUR 1.5 billion by the year 2010 and dismissals of up to 6,000 to 9,000 staff.
      The Siemens bribes scandal that surfaced in November added to problems in setting up the new company. In December the fusion was postponed by three months because of related issues to be cleared up.
      After further clarifications, Siemens committed to compensate for the damage caused by the delay by investing a further EUR 700 million into the new company.
     
Beresford-Wylie remains optimistic in spite of the reduced market expectations.
      "At the moment I am extremely pleased. Nokia and NSN are a dream combination. We are able to provide know-how from networks to services to end-user equipment. Our range of products is extremely versatile", he said.
      "We believe that by 2015 some five billion people, twice as many as today, will be using mobile telephones. We also believe that the majority of these people will have access to the Internet through a broadband connection", Beresford-Wylie continued.
      The trick for the network companies is to be able to provide services cheaply enough.
      "Bringing the Internet and connectivity to the vast majority of people by 2015 will require finding new ways to lower the cost of connections, particularly in the large emerging markets", the CEO formulated.
      Unfortunately the vision for the network operators is slightly different. Of the present 2.5 billion mobile phone users worldwide, only 300 million have a broadband connection, and the operators are feverishly seeking ways to lower expenses, for example, by sharing networks with competing operators. This, in turn, translates to lowered network investment needs.
     
No new information was volunteered by NSN with regard to the projected dismissals. Among the 9,000 Finnish workers this information has been a cause of dread and anxious anticipation.
      "The issue of lay-offs concerns Finland, Germany, and some other countries as well, as we have to respect the local legislation and regulations in all of these regions", Beresford-Wylie said.
      "The notion that our German workers would be 'better off' than their Finnish counterparts because of better protection against dismissals is simply wrong. Our Finnish employees are not worse off in any respect."
      "The fact remains that our heart has two chambers: Finland and Germany. We are committed to keeping both countries as integral parts of our company", the CEO concluded.


Previously in HS International Edition:
  Nokia Siemens Networks debuts at Barcelona 3GSM Congress (13.2.2007)
  Nokia F-20 report - an investor´s treasure trove (14.3.2007)

Links:
  Nokia Siemens Networks

Helsingin Sanomat