Nokia Networks (before NSN)

Business in Russia

Main article: Nokia Networks in Russia

History

2014: Renaming into Nokia Networks

Logo of NSN company before renaming in 2014

On April 29, 2014 Nokia Corporation announced that NSN is renamed into Nokia Networks.

2013

Nokia redeems a share of Siemens

In June, 2013 Nokia and Siemens announced signing of the binding agreement within which Nokia will purchase a 50 percent share of Siemens in Nokia Siemens Networks joint venture.

Transaction amount is 1.7 billion euros. From them 1.2 billion euros will be paid by money, before completion of the transaction.

The transaction was approved by the management of both parties and is subject to end after accomplishment of standard procedures in the III quarter 2013. After end the enterprise will become 100 percent subsidiary company Nokia.

According to the official statement, the current management of Nokia Siemens Networks will remain, including Rajeev Suri, the CEO of joint venture. The headquarters will remain in Espoo, Finland.

Commenting on the transaction, the president and the chief executive officer of Nokia Stephen Elop said that this transaction interests Nokia first of all, because of LTE equipment which makes joint venture and that acquisition of a missing share in Nokia Siemens Networks will do good to shareholders of the Nokia group.

In turn, Joe Kaeser, the chief financial executive of Siemens, told that Siemens sells the share because the companies are more interesting other directions: the power, utilities and health care^[1].

From the moment of the basis the enterprise became one of the largest equipment manufacturers of communication who is used by operators in more than 150 states worldwide.

Nokia and Siemens: Negotiations on cooperation termination

Nokia and Siemens companies conduct negotiations on agreement cancelation on coproduction of telecommunication equipment, Bloomberg with reference to three independent sources reports in February, 2013.

One of the discussed options includes the redemption of a 50 percent share of Siemens in Nokia Siemens Networks joint venture Nokia company and its further partnership from Franco-American Alcatel-Lucent.

The German Siemens repeatedly declared desire to leave business on release of telecommunication equipment because of inability to resist to the competition in this sector to the Chinese suppliers, such as Huawei Technologies which in 2012, according to the preliminary information, bypassed Ericsson and won first place on sales volume.

Ben Verwaayen, the CEO of Alcatel-Lucent directing the company the last 4.5 years will resign right after to him find replacement. Verwaayen decided to resign authority because of inability to save market positions and to resist to competitors from China.

Negotiations between Nokia and Siemens entered an active phase right now as in April, 2013 the term of the 6-year agreement between Nokia and Siemens signed in April, 2007 expires. Shareholders can vote for its prolongation.

According to one of sources, Nokia Siemens Networks can be brought to the IPO. However two other sources claim that it is improbable option. The parties can also not come to any agreement at all, considers one of sources.

"It is difficult to tell what will be with Nokia Siemens Networks. However eventually the company will not be neither in hands of Nokia, nor in hands of Siemens", - the analyst of the third largest bank in Denmark considers Jyske Bank Robert Jakobsen.

As one of measures which help to remain afloat Siemens Network Nokia uses staff reduction. In November, 2011 the company stated that it is going to dismiss 17 thousand employees by the end of 2013.

The I quarter: Sales reduction for 5%, the profit of 3 million euros

The volume of net sales of Nokia Siemens Networks in the I quarter 2013 decreased by 5% in comparison with the same period of 2012 to 2.8 billion euros, operating profit was 3 million euros, against a loss in the amount of 1 billion euros the previous year.

2012

Recession of revenue for 2%. Annual loss of 799 million euros

Revenue of Nokia Siemens Networks for the IV quarter 2012 made 4.0 billion euros in comparison with 3.8 billion euros (height of 5%), profit the previous year - 251 million euros against 67 million during the same period of previous year (height of 275%). Annual revenues of division were reduced by 2% to 13.8 billion euros. The annual loss made 799 million euros in comparison with a loss in the amount of 300 million euros in 2011.

One more part of Nokia Siemens Networks is offered for sale

Nokia Siemens Networks continues to look for business stabilization options. The concern conducts negotiations with a number of the companies on sale of the division of support systems of business, reported Reuters with reference to the CEO of the company Rajiv Suri.

The company is going to continue to get rid of non-core and non-profitable assets and will focus on the equipment and the systems of broadband access.

Rajiv Suri expects that the total costs of telecom operators of the equipment and systems in the current year will be up to standard previous, despite some decrease in investments into the USA.

Also within cost reduction will lay off about a quarter of employees.

"We already sold about six assets", - Suri told. "It the divisions which are not relating to mobile business or are insufficiently profitable".

One of applicants for an asset - the Swedish company Ericsson.

According to Suri, the restructuring program advances initial plans approximately for 6 months. He expects that the personnel increase of the company in India where NSN expands the presence will become its result. Now the Indian state makes about 10000 employees and 5000 more contractors.

2011: Staff reduction on 17 thousand people

On November 23, 2011 Nokia Siemens Networks announced that it within new strategy for restructuring is going to cut down the global staff on 17 thousand people by the end of 2013^[2] at once^[2].

At the time of the declaration, the total quantity of employees of Nokia Siemens Networks makes about 74 thousand people, says the company worldwide. This reduction which should become the largest in the history of the Finnish giant is a step within new strategy which means focus shift on business in the field of mobile network infrastructure and services, with a special focus in the market of mobile broadband access.

"We consider that the future of our industry – in the field of services of mobile broadband communication and the accompanying services. Therefore we intend to be the sole leader in these areas. At the same time, we should take necessary measures for maintenance of long-term competitiveness and increase in profitability in a difficult situation in the market of telecommunications", - Rajeev Suri, the chief executive of Nokia Siemens Networks noted.

It is said in the statement of the company that "the planned reductions, as expected, will be caused by approval of labor power of the company of its new strategy and also carrying out a number of measures for performance improvement and improvement of business performance of Nokia Siemens Networks".

"The planned measures will include elimination of a matrix organizational structure of the company, consolidation of assets, consolidation of some central functions and also cost reduction thanks to integration with wireless company assets of Motorola, improvement of efficiency in management of services and simplification of processes in all company", - representatives of the Finnish giant said.

Also NSN noted that it soon is going to begin process of negotiations with representatives of the employees to provide process of reductions according to legal requirements depending on the country and also on purpose "find socially responsible methods of satisfaction of need for staff reduction".

Nokia Siemens Networks, after entry into its structure of division of Motorola Networks, hopes to become the third largest solution provider for wireless infrastructure in the USA, the largest foreign supplier of wireless solutions in Japan and to be fixed on the second place in the world market of network infrastructure.

2010: Purchase of assets of Motorola on infrastructure of wireless networks

In July, 2010 Nokia Siemens Networks and Motorola corporation jointly announced reaching an agreement on which Nokia Siemens Networks purchases the most part of assets of Motorola on infrastructure of wireless networks for $1.2 billion. The companies are going to complete all procedures for closing of the transaction by the end of 2010.

It is expected that as a result of the transaction from division of Networks of Motorola company will pass into Nokia Siemens Networks about 7500 employees and also the large research centers in the USA, China and India. Motorola will save iDEN business, practically all patents connected with infrastructure of wireless networks and also some other assets.

The division of Motorola company on production of wireless network infrastructure proposes solutions and services for networks GSM, CDMA, WCDMA, WiMAX and LTE. It is noted that the division is the leader in the market WiMAX with 41 contracts in 21 countries; has strong presence in global market of CDMA with 30 operating networks in 22 countries; is a large player in a segment of GSM with more than 80 operating networks in 66 countries and also has excellent base for implementation of technology LTE.

As a result of the transaction, Nokia Siemens Networks in particular is going to set partner relationship with more than 50 operators and to strengthen the positions with such largest communication service providers as China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless and Vodafone.

"While customers look for ways of transition from CDMA networks to technologies of the next generation, the division of Motorola on equipment manufacturing for wireless network infrastructure will help us to satisfy better these requirements", - Bosco Novak, the head of division of work with customers of Nokia Siemens Networks says. "Together we will be able to use better advantages of TD of production of production of Nokia Siemens Networks and the solutions WiMAX and LTE of company Motorola, fully meeting the growing technology and commercial needs of customers".

Nokia Siemens Networks and Motorola also study cooperation options in a segment of solutions for services of public security.

2007: Creation of JV Nokia Siemens Networks

The Nokia Siemens Networks joint venture was created in April, 2007 as a result of merge of two divisions: Networks Business Group of Nokia company and business of Siemens connected with equipment manufacturing for mobile and fixed networks.

Notes