Nokia Siemens Networks (NSN) chairman Jesper Ovesen (pictured) expects the mobile broadband market to be relatively flat this year as operators continue to rein in capital spending against an uncertain economic backdrop.

Ovesen made his views known in a statement fronting the 2012 annual report, published this week, from the Nokia and Siemens joint venture.

The chairman is nonetheless confident that radical restructuring and a change in strategic direction – to focus on mobile broadband and services – will help NSN ride the storm. He laid down a target of maintaining an operating margin (excluding specific items) of between 5 per cent and 10 per cent on a “longer term” basis.

With an adjusted operating profit of EUR822 million from net sales of EUR13.7 billion, NSN’s operating margin was a shade over 6 per cent in 2012. The EUR822 million sum was a 145 per cent jump from the previous year.

Factor in painful restructuring costs and other expenses, however, and the picture looks less rosy. After one-off charges are included in the mix, NSN made a full-year operating loss of EUR741 million.

NSN continues to target a reduction in its annualised operating expenses and production overheads – again, excluding specific items – by more than EUR1 billion by the end of 2013 (compared with 2011).

The latest annual report, for the first time, breaks down the operational performance of its mobile broadband and global services division.

Mobile broadband is the more profitable of the two, clocking up an adjusted operating margin of 8.1 per cent on net sales of €6.04 billion. Global services, on net sales of EUR6.93 billion, turned in an operating margin of 4.8 per cent.

NSN’s mobile broadband operations have been buoyed by LTE.

“Industry analysts put our market share of 4G [LTE] at about 20 per cent, confirming us as a strong number two player in this important, fast-growing mobile technology,” said chief executive Rajeev Suri in his annual report statement. “Our strong position extends well beyond radio into areas such as professional services, 4G IMS core, customer experience management (CEM) and subscriber data management.”

While global services showed improved profitability from 2011 – the unit’s adjusted operating margin was 3.4 per cent that year – Suri acknowledges scope for improvement.

The unveiling of the new annual report format coincided with NSN’s offer announcement to raise EUR600 million in new debt through a Senior Notes facility. Net proceeds from the sale will be used to prepay certain existing debt of NSN.