After nearly 6 years and hundreds of millions of Euros invested to recently resurgent success, Nokia has officially announced that it has purchased former partner Siemens’ stake in the former Nokia Siemens Networks cellular network solutions joint venture for $2.2 billion. The venture was first announced in early 2007 to great fanfare, only to struggle in the wake of the financial crisis and the unforseen rise of the Chinese telecom sector.
Nokia-Siemens Networks was meant to bring together two former leaders in cellular telecom in Nokia and Siemens with the initial goal of providing end-to-end hardware and network management solutions for network operators. Key milestones included successful LTE data calls, development of data network variants and network management efficiency gains by providing all necessary infrastructure. However, the initial years of the venture were better known for losses in those business sectors, to the point that the venture completely restructured in 2011 to move away from the end-to-end solutions offerings to focus completely on mobile broadband development.
It was only until the restructure to focus on mobile broadband in late 2011 that the venture actually experienced success with 6 consecutive quarters of positive gains since then, along with growing revenue and an actual operating profit. The venture was also known for its predilection for acquisitions, as it acquired Motorola’s former wireless equipment division from the company and merged the employee base into the venture, along with other smaller acquisitions that were ultimately divested as a result of the aforementioned restructuring.
With Siemens moving away from telecom to focus on healthcare services and general infrastructure along with energy generation and related businesses, Nokia was in the best position possible to purchase the stake in order to maintain the viability of the business. The current Nokia Siemens Networks executive team will be left in place after the transaction is complete, while the brand will be phased out with a new brand being introduced at the close of the transaction later this quarter.
