Nokia-Siemens Networks is pushing into North America where the world's third-largest telecom equipment maker with the goal of being number two.
Chief Executive Rajeev Suri said the company should be helped out by Japan's Softbank to buy 70 per cent of Sprint Nextel Corp for $20 billion, and Deutsche Telekom's purchase of MetroPCS. The company has been doing well. It has gone from number five to number three in past few years, and now we will go target number two.
This might be tricky as the company is about to change hands. A six-year old shareholder pact between partners Nokia and Siemens expires on April 1 and while Siemens wants out, Nokia is not keen to buy it out. The company is much healthier after a restructuring which included a cull of staff from 75,000 to 58,000 and sale of non-core assets.
Operating and gross margins rose last year, and NSN actually contributed to co-parent Nokia's cash flow instead of being a drain. In the US Softbank's arrival could work to NSN's advantage because the company could use on its strong supplier relationship with Softbank in Japan to win more contracts at Sprint and Clearwire, which Sprint is in the process of buying.