NSN's ownership sorted out... for now

Daryl Schoolar/Ovum
03/07/2013
News
Commentary

Nokia Siemens Networks was formed on April 1, 2007, as a joint venture between Nokia and Siemens.

The JV was forged to allow these two European companies to better compete against larger regional rival Ericsson and fast-rising Asian vendors Huawei and ZTE. However, NSN soon became known for poor corporate integration and mismanagement.

In other words, while NSN was able to hover between the number two and three market share position in the wireless infrastructure market, the NSN JV never became the infrastructure juggernaut it was meant to be.

On July 1, 2013, Nokia announced that it was going to purchase Siemens’ share of the joint venture for €1.7 billion ($2.2 billion), thus ending the JV. NSN will also drop Siemens from its name.

This also brings to an end the months, if not years, of speculation on the ownership structure of NSN. As it now finally appears to be moving in the right direction with improved quarterly financials, putting ownership issues behind it is extremely positive news for the infrastructure company.

Nokia removes an unnecessary distraction for NSN

During the later part of 2011 Nokia Siemens Networks announced a new strategy to improve its performance. With this new strategy NSN would primarily focus on selling mobile broadband infrastructure and related services and solutions.

The strategy also called on NSN to reduce cost by getting out of non-core businesses, such as Wimax and microwave backhaul, and shedding approximately 17,000 positions within the company. Another aspect of the strategy called for the vendor to increase quality control for its network gear.

Related content