Restructuring is paying off: Nokia Siemens CEO

BANGALORE, INDIA: Telecom networking equipment maker Nokia Siemens Networks chief executive office (CEO) Rajeev Suri said that the restructuring decision, taken about a year back, has started to pay off. While addressing the media today, he said that restructuring is on track.

Matter of fact, according to him, the restructuring is six months ahead of the projected time frame, owing to which the company has seen a 7.4 per cent year-over-year decline in opex. Moreover, the company saw third consecutive quarter of positive free cash flow, he added.

"We are seeing a huge potential of growth from mobile broadband and services. You need not be an end-to-end supplier but focus on your core strength. Our operator customers do not need end-to-end products. We are focusing on backhaul, radio, core and services," he added.

The Finnish-German telecom equipment maker, in November 2011, had announced that as part of its restructuring plan it would cut 17,000 jobs by the end of 2013 in order to cut annual costs by one billion euros ($1.3 billion).

The company's headcount, which stood at 74,000 and odd when the restructuring was announced, has about 64,000 employees currently.

However, Suri clarified that this 11,000 could also include the ones who left when a couple of their business units were divested. That said, he refused to give more clarity on how many have been axed as part of the restructuring alone, so far.

In its bid to become a mobile broadband specialist, the company has so far offloaded four of its non-core business units in the past 10 months, out of the planned six. NSN sold its microwave transport business to DragonWave Inc., which is itself in trouble now, then sold its fixed-wireless broadband business to CN Tetragen, then divested its wireline broadband assets to ADTRAN and also have sold its WiMAX business to NewNet.

The company, which is facing stiff competition from the likes of Chinese equipment vendors Huawei and ZTE, has also put up its BSS division for sale, which is allegedly being eyed by Ericsson.

The company has so far won 65 commercial LTE customers globally, and claims that it account for about 35 per cent of LTE contract market share.

NSN is also planning to focus more on low cost countries, such as India, Portugal, Manila, Shanghai among others, for its research and development (R&D) operations. Sixteen per cent of its R&D activities are carried out of low cost countries.