Nokia Corporation (ADR)(NYSE:NOK) Siemens Network, mobile network equipment maker, is in discussions with several companies to sell its business support systems unit as it seeks to do away with some product lines and devote focus on mobile broadband.
Formed by Siemens and Nokia in 2007, Nokia Siemens has been struggling for profitability as a result of pricing pressure from ZTE Corp and Huawei Technologies, the Chinese rivals. It is also facing competition from Ericsson in Sweden. There has been a huge economic downturn that has crimped expenses by telecom companies.
Overall expenses by telecom companies are predicted to fall flat this year, as per CEO Rajeev Suri in Bangalore. However, Nokia Siemens sees some rebound in investments by clients in the US.
To enhance success, Nokia Siemens is selling non-core units and laying off about a quarter of its staff.
The company has reportedly sold off its network equipment for wired networks and left the market for a wireless technology, WilMax, which has failed to win support among carriers as LTE.
Ericsson was reported to be in a position to buy Nokia Siemen’s BSS unit earlier this month. The unit is accountable for billing and charging systems for telecom operators.
Suri has mentioned that the group’s restructuring was on track. The company is believed to be 6 months ahead the plan. Suri expects workforce in India to see an increase after the restructuring as the firm scales up its offshore services in the country. The firm presently has around 10,000 staff in India.
The restructuring seems to be positive for Nokia Siemens generating positive fund for three straight quarters and Suri predicts that to be sustainable. He said that the company has taken out considerable amount of headcount already and it is on track in the business line divesture too.