Nokia Siemens Networks, the struggling
telecom equipment major, has decided to sell its WiMax wireless business to
NewNet Communication Technologies.
The company is divesting the WiMax division
to cut expenses. This will also assist Nokia Siemens to reduce its total
employees by 17,000 in two years in a bid to save EUR 1 billion.
NewNet Communication Technologies, a
company owned by Skyview Capital, will buy the business and will absorb about
300 employees in the deal.
The companies didn’t disclose the terms of
the sale.
Nokia Siemens aims to eliminate 17,000 jobs
by the end of 2013, sell real estate, cut businesses and consolidate jobs and
suppliers to reduce annual expenses by 1 billion euros in the next two years.
WiMax business is going through a bad phase
due to the emergence of LTE which has been adopted by the largest
telecommunications companies in the U.S. and Europe.
In August 2011, the WiMAX Forum announced that the total worldwide sales of WiMAX equipment reached $502.1 million in the
first quarter of 2011, up 49 percent from the first quarter of 2010.
In 2011 WiMAX equipment alone is expected
to be a $2 billion industry. Investment in WiMAX technology is flowing, and in
the first half of 2011 over 30 different WiMAX networks were either launched or
expanded operations, according to Infonetics Research.
Nokia Siemens received a cash injection of
1 billion euros from its parent companies including Nokia and Siemens in
September as Jesper Ovesen, the former chief financial officer of TDC A/S, was
named to oversee the restructuring as executive chairman.
Nokia Siemens has fallen behind competition
and has been unprofitable in all but one quarter, according to a report in
BusinessWeek.
Siemens and Nokia abandoned talks with
private-equity companies in July after the buyout firms failed to come up with
a compelling offer. The companies said in September that Nokia Siemens would
become a more independent entity.
Nokia Siemens had a 13.2 percent market
share in 2010, tied with Alcatel-Lucent for third place in the mobile
infrastructure market, according to researcher Gartner. Ericsson was first with
34.1 percent and Huawei second at 15.6 percent.
By Telecomlead.com Team
editor@telecomlead.com
