Ovum Comments on Nokia Siemens Deal

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“Yesterday’s announcement that Nokia is to acquire Siemens’ half of Nokia Siemens Networks is a very positive step forward for the mobile infrastructure company,” according to Daryl Schoolar, principal analyst in Ovum’s network infrastructure team.

He continues: “It has been approximately a year and a half since Nokia Siemens Networks announced its reorganization. NSN’s financials over the last couple of quarters indicate this reorganization is moving in the right direction. Unfortunately, against this backdrop, Siemens has been actively trying to sell its half of NSN. This has brought unneeded uncertainty to the ownership makeup of the vendor.

“Nokia’s acquisition of Siemens’ share of NSN puts this uncertainty to end, and removes an unnecessary distraction from NSN’s turnaround. NSN’s customers should also see this move as a positive.

“Mobile operators want stability in their network vendors, so ownership uncertainty certainly didn’t help NSN in the pursuit of new wins. Knowing who will actually own NSN going forward should ease those concerns. This ownership outcome is certainly better than the other possibility, the selling of Siemens’ half of the company to a private equity fund. Private equity ownership brings its own worries, as one never knows how the equity firm will manage the company and if the firm would be willing to invest in the R&D needed to keep NSN’s network solutions competitive.

“On the downside of all of this, Nokia as a whole remains a challenged company as its handset business continues to struggle. This could put unnecessary pressure on NSN to bolster the devices sagging performance or could even lead to the return of ownership questions in the future. For now, however, Nokia’s acquisition of Siemens’ half of NSN has to be seen as a positive move for all parties involved.”

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