CurrentCOMPETE Client Login

Home Contact Us About Us Analyst Team News & Events Resources

Fixed Access Infrastructure Client access Overview Intelligence Report Summaries Company Report Summaries Product Report Summaries Complimentary Competitive Intelligence Service Provider Infrastructure MARKET SEGMENTS Digital Media Infrastructure Fixed Access Infrastructure IP Services Infrastructure Mobile Access Infrastructure Transport and Routing Infrastructure Telecom Vendor Services Tracker     Complimentary Competitive Intelligence INTELLIGENCE HIGHLIGHTS Business Network and IT Services Business Technology and Software Consumer Services and Devices Service Provider Infrastructure   Most recent >> MORE COMPLIMENTARY COMPETITIVE INTELLIGENCE Complimentary Advisory Reports CurrentCast Podcasts Webinar Replays

NSN's New Formula for Success: Redefinition of Core Strategy as Mobile Broadband and Services | Nov 23, 2011 | Fixed Access Infrastructure | Analysts: Erik Keith, Peter Jarich Event Summary November 23, 2011 – Nokia Siemens Networks (NSN) announced plans to realign its business, focusing on mobile broadband (including optical), customer experience management and services. Business areas not consistent with the new strategy are planned to be divested or managed for value. NSN is aiming to reduce its annualized operating expenses and production overhead by EUR 1 billion by the end of 2013, reducing its global workforce by approximately 17,000 in the process. | Read Press Release | Quick Take Analytical Summary • Current Perspective: Positive on Nokia Siemens Networks’ decision to redefine its core, strategic focus on the mobile broadband and services markets. In the process, the company is going to leave some businesses that it’s in been in for a long time. Specifically, it’s called out four categories of its businesses. “Lead” businesses will be mobile broadband and customer experience management. Global services with be an “attached” business – moving forward alongside the leads. “Adapted” businesses include managed services, consulting and systems integration, all of which will be adapted to the new focuses. The “exit or maintain” category is just as it sounds and includes: fixed-line VoIP, broadband access, WiMAX, Carrier Ethernet, BSS and Communications and Entertainment Solutions (which includes NSN’s Ubiquity IPTV middleware/services business). To be sure, competitors will seize the opportunity to depict this as a sign of NSN’s instability and the process of divesting or sunsetting businesses will be painful. Yet, given the dramatic evolution of the service provider infrastructure market (and industry) over the last decade, there has already been considerable attrition and consolidation on both the corporate and product/business unit level, particularly in the wireline/fixed access sector, as evidenced by NSN’s own exit from the GPON market several years ago, and the more recent decision to work with Dragonwave to limit its exposure to microwave backhaul. For NSN, this decision reflects the impact of market realities imposed by customer demand, competitive pressures and related market dynamics, and serves as a bellwether to the potential strategic redirections by NSN’s closest (Tier 1) rivals in the SPI market. • Vendor Importance: Very high to NSN, because the company needed to redefine/refocus its corporate strategy, specifically to address key growth areas for the company. The fact that NSN is now acutely focused on mobile broadband and services (including customer experience management and optical products tied to mobile broadband) is not coincidental, as they’re all areas of strong expertise and market success for NSN – not to mention areas where there is still market opportunity left to be tapped. While undoubtedly a difficult decision, which NSN came to after exploring a broad range of alternatives over the past several years, the company has nevertheless taken a vital step forward to ensure its long-term viability as a Tier 1 vendor within the overall service provider infrastructure market. • Market Impact: Very high on the overall service provider infrastructure market, and not just in terms of NSN’s enhanced and exclusive focus on the mobile broadband and services market segments. NSN is effectively exiting a broad array of market sectors (sooner or later) thanks to termination, divestiture or “maintenance mode”. NSN’s exit from these sectors means that a sizeable (and global) installed base of networking gear will become ripe targets of opportunity for replacement/migration by rivals, potentially paving the way for corollary success by these same rival vendors in NSN’s two new core focus areas. At the same time, the potential for other companies to acquire these businesses opens up an opportunity for them to acquire new customers or products in a wide array of markets. CLIENTS ONLY Current Analysis Perspective | Client access - Full report in Fixed Access Infrastructure | More information Share this Current Analysis Competitive Intelligence Highlight: Top Top

Current Analysis Offices Washington, D.C. +1 703 404 9200, Toll free 877 787 8947 Paris, France +33 (0) 1 41 14 83 15 © 2012 Current Analysis Inc. All rights reserved. | Privacy Policy

Follow Current Analysis

Nokia Siemens Networks puts mobile broadband and services at the heart of its strategy; initiates restructuring to maintain long-term competitiveness and improve profitability

• Focuses on mobile network infrastructure and services market
• Targets significant operating expense and production overhead savings
• Plans global workforce reduction of approximately 17,000

Espoo, Finland – November 23, 2011 - Nokia Siemens Networks today announced its strategy to focus on mobile broadband and services and the launch of an extensive global restructuring program.

“We believe that the future of our industry is in mobile broadband and services – and we aim to be an undisputed leader in these areas,” said Rajeev Suri, chief executive officer of Nokia Siemens Networks. “At the same time, we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market.”

Strategy update

Nokia Siemens Networks will target end-to-end mobile network infrastructure and services, with a particular emphasis on mobile broadband. “Our goal is to provide the world’s most efficient mobile networks, the intelligence to maximize the value of those networks, and the services capability to make it all work seamlessly,” said Suri. “Despite the need to restructure parts of our company, our commitment to research and development remains unchanged, with investment in mobile broadband expected to increase over the coming years.”

Nokia Siemens Networks plans to realign its business to focus on mobile broadband (including optical), customer experience management and services. The company’s Services organization will further strengthen its highly-efficient global delivery system. Business areas not consistent with the new strategy are planned to be divested or managed for value. Quality and innovation will continue to be priorities for the company, with ongoing investment in both areas.

Restructuring program

Nokia Siemens Networks targets to reduce its non-IFRS* annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011. While these savings are expected to come largely from organizational streamlining, the company will also target areas such as real estate, information technology, product and service procurement costs, overall general and administrative expenses, and a significant reduction of suppliers in order to further lower costs and improve quality.

Nokia Siemens Networks plans to reduce its global workforce** by approximately 17,000 by the end of 2013. These planned reductions are expected to be driven by aligning the company’s workforce with its new strategy as well as through a range of productivity and efficiency measures. These planned measures are expected to include elimination of the company’s matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola’s wireless assets, efficiencies in service operations, and company-wide process simplification.

Nokia Siemens Networks will begin the process of engaging with employee representatives in accordance with country-specific legal requirements to find socially responsible means to address these reduction needs. More information will be shared in impacted countries as the process proceeds. In order to reduce the impact of the planned reductions, Nokia Siemens Networks intends to launch locally led programs at the most affected sites to provide re-training and re-employment support.

“As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation,” said Suri. “These planned reductions are regrettable but necessary – and it is our goal to make them in a fair and responsible way, providing the support we can to employees and communities.”

About Nokia Siemens Networks

Nokia Siemens Networks is a leading global enabler of telecommunications services. With its focus on innovation and sustainability, the company provides a complete portfolio of mobile, fixed and converged network technology, as well as professional services including consultancy and systems integration, deployment, maintenance and managed services. It is one of the largest telecommunications hardware, software and professional services companies in the world. Operating in 150 countries, its headquarters are in Espoo, Finland. www.nokiasiemensnetworks.com Talk about Nokia Siemens Networks’ news at http://blogs.nokiasiemensnetworks.com and find out if your country is exploiting the full potential of connectivity at www.connectivityscorecard.org