Selling infrastructure gear is no easy task. Operators get to pick and choose who they want to build out their networks, and often go with different vendors for different parts of the network just so they can save some money. Fierce competition from the Far East players, we’re looking at you Huawei and ZTE, has forced everyone to cut their prices. This price war has caused Nokia Siemens Networks to lose money since the joint venture was setup back in 2007. Both Nokia and Siemens say they’re committed to making sure the JV succeeds, but according to sources who spoke to the Wall Street Journal NSN is looking to sell a majority stake in the company for at least $2 billion. It’s not that they want to exit the infrastructure game, it’s just that they need money to keep on fighting the good fight.
When NSN was formed they had an express goal of entering the North American market. To their credit they scored a contract with T-Mobile to roll out their 3G/4G network, and more recently they signed a contract with LightSquared, an operator who plans on offering a wholesale LTE network to businesses who will then resell the service to customers, but at the end of the day revenue from North American markets totals just 6% of what NSN makes around the world. In America the leader is Alcatel-Lucent, with 36% of their revenue coming from FreedomLand, and they’re a likely candidate to purchase that majority share in NSN, along with Samsung, who has ambitions of becoming a leader in wireless infrastructure.
With Nokia’s Q1 2011 financial results conference call scheduled to take place in just a few short hours, we’re sure an analyst is going to bring this rumors up during the Q&A session, but is he going to get an answer? No.