Nokia Siemens Networks Decides What Matters Most

(Nov 30 2011) 4G , WiMAX

1. By Ken Rehbehn, principal analyst, Brian Partridge, research VP, Vince Vittore, principal analyst, and Sheryl Kingstone, research director, Yankee Group

   Nokia Siemens Networks (NSN) newly announced restructuring plan focusing its business on mobile broadband (and cutting 17,000 employees from its global rolls) is a step in the right direction as it bolsters the company messaging and stake in its Liquid Network strategy, but it requires excellent execution and improved market trust to succeed.

   Overall, NSN is focusing on mobile broadband and customer experience, while better aligning its managed services, consulting, network analytics, system integration and optical network businesses, and divesting or managing for value its WiMAX, BSS, fixed-line VoIP, narrowband, communications/entertainment, broadband access and carrier Ethernet sectors. Yankee Group believes NSN is:

   • Positioning to recapture mobile infrastructure market leadership. As Huawei and ZTE appeared in networks formerly operating as showcase NSN operations, the mindshare enjoyed by NSN has waned. The company's renewed commitment to mobile broadband and customer experience management can help rebuild its stature if NSN produces proof of innovation and significant deal wins beyond its legacy customer base. 
   • Positioning to build on success in customer experience management. NSN wants to focus its network expertise around quality of service (QoS) to help operators generate a deeper understanding of subscriber needs through the use of device performance and network usage data enriched with demographic and other subscriber-specific data gathered from Web, CRM, billing and other systems. However, improving the customer experience goes far beyond providing a consist QoS; NSN will need to use its assets and build on expertise beyond its core network strengths.
   • Risking its leadership position in mobile voice and messaging. With over a billion subscribers and over 220 customers, NSN has a leading position in the mobile soft switching (MSS) space. On the IMS front, NSN has IMS/MMTEL wins in key accounts such as China Mobile, Zain Bahrain and Verizon Wireless. NSN must present a clear view to its customers of its role in the multi-year transition from circuit switched to IP-based voice and messaging systems, including the IMS-based Voice over LTE (VoLTE) architecture. While VoLTE presents a significant opportunity, NSN may find that, as a more focused company, it is vulnerable to expansive end-to-end solutions capable of addressing both fixed and mobile voice transitions from circuit switched to IP architectures. 
   • Smartly exiting entertainment on the go. NSN had the opportunity to be an active Tier 1 player in the multi-screen market with its Myrio middleware serving as the base for operators moving to build ARPU and defend existing video service businesses. However, the company never put significant resources into the market and only has Belgacom as a marquee customer. We believe NSN exiting the communications and entertainment business is a logical and needed move. 

   “NSN's announcement is not a surprise,” said Ken Rehbehn, principal analyst at Yankee Group and co-author of the report. “The move was communicated in earlier positioning of its Liquid Network strategy and stands as a sensible approach toward ensuring investment dollars flow to portfolio elements that are essential for future growth and profits.  If the company executes well, builds on its strong mobile radio technology and shores up its customer experience offerings, it could significantly reshape the telecom equipment manufacturer landscape—for the better.”

   Bookmark or Share this article

Login to comment