Bloomberg News

Nokia Siemens’ Novak Predicts Revamp Will Help 2013 Earnings

February 28, 2012

Nokia Siemens Networks, the wireless-equipment venture of Nokia Oyj (NOK1V) and Siemens AG (SIE), said earnings next year will benefit from its current revamp.

Most of the restructuring will be done by the end of 2012, Bosco Novak, Nokia Siemens’s head of global services, said in an interview at the Mobile World Congress in Barcelona.

“The brain work has been done, now it is up to execution,” Novak said. “It will take us until the end of 2012 to do the majority of the work. It will show in the numbers next year.”

The company, whose main competitors are Ericsson AB and Huawei Technologies Co., said in November that it will eliminate 17,000 jobs worldwide, equivalent to about 23 percent of its workforce, by the end of 2013. The cutbacks are part of a strategy of reducing annual costs by 1 billion euros ($1.3 billion).

Nokia Siemens, which competes with Ericsson AB and Alcatel- Lucent as well as Chinese vendors such as Huawei Technologies Co., is in talks with potential buyers and expects more divestments after it sold three divisions last quarter to refocus its business on mobile broadband, Chief Executive Officer Rajeev Suri said this week.

Novak said that European telecommunications companies have been “cautious” at the start of 2012 as they postpone investments in the current economic environment. The U.S. market remains strong, he added.

“We see hesitation in Europe, but we know that once these cool devices come to Europe, consumers will want them,” he said.

Researcher Gartner estimates the telecom equipment market will grow 6.9 percent in 2012, according to a report published last month.

To contact the reporter on this story: Marie Mawad in Barcelona at mmawad1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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