Details have leaked this week on exactly which businesses Nokia Siemens Networks (NSN) may exit as part of its major restructuring that will see 23 percent of its workforce culled. In an announcement Wednesday, the troubled telecoms vendor said it will cut 17,000 jobs and focus on its mobile broadband, services and customer experience management units. There was little information at the time on its plans for its remaining businesses, and in a press conference later that day CEO Rajeev Suri did not elaborate on which parts of the business NSN would quit.
However, according to a Mobile Europe report, which cites a leaked internal memo, Suri said NSN may "exit or maintain" a wide range of businesses including "perfect voice (fixed-line VoIP), broadband access, WiMax, narrowband, carrier Ethernet, business support systems (BSS), and communications and entertainment solutions (CES)." Those businesses, Suri noted, "will be targeted for exit (possibly through divestment) or put in maintenance mode."
Interestingly, Suri claimed in the press conference that other vendors would be forced to follow NSN’s drastic decision to focus only on core elements of the telecoms business. "We are the first company to decide to focus on this sector (mobile broadband) while others remain committed to that [end to end approach]. The industry does not any longer allow for end to end players to be successful. So this give us a clear opportunity to differentiate," Suri said.
Earlier this month NSN agreed to sell its microwave transport business – including associated operational support and support systems – to high-capacity microwave technology company DragonWave. If completed, the deal will cost DragonWave EUR10 million in cash and EUR5 million in shares. Clearly, this deal is just the start of major activity at the joint venture vendor that is facing increasing pressure from established European rivals and ambitious Chinese players such as Huawei and ZTE. It is aiming to reduce its non-IFRS annualised operating expenses and production overheads by EUR1 billion by the end of 2013, compared to the end of 2011.