New York:Nokia Siemens Networks is in advanced talks to sell a unit that helps operators manage their billing systems as the unprofitable network equipment venture of Nokia Oyj and Siemens AG focuses on mobile broadband, people with knowledge of the matter said.
The Business Support Systems division has attracted interest from potential buyers including Sweden’s Ericsson AB, US-based Amdocs Ltd and private-equity firms, the people said, asking not to be identified as the discussions are private. The business may fetch as much as 300 million euros ($377 million), they said.
Nokia Siemens and French rival Alcatel-Lucent SA are among telecommunications equipment providers that are slashing jobs and costs as the slowing global economy crimps spending on infrastructure for mobile networks. Nokia Siemens is in the process of eliminating some 17,000 jobs, about a quarter of its workforce, by the end of next year. Alcatel-Lucent said last month it will cut 5,000 jobs after slumping to a quarterly loss.
“As we announced in November, Nokia Siemens Networks believes that the future of our industry is in mobile broadband and we are intensifying our strategic focus on that area,” Nokia Siemens spokesman Ben Hunt said yesterday in an e-mailed response to questions, declining to comment on the BSS unit. “Business areas not consistent with the new strategy are planned to be divested or managed for value, and we have already announced the divestment of a number of these business.”
Ericsson declined to comment. Representatives for Amdocs didn’t return calls seeking comment.
Siemens and Nokia abandoned talks in July last year on selling the venture to private-equity investors after the buyout firms failed to come up with a compelling offer.
The manufacturer has been a continuing source of trouble for Nokia, which has seen its share of the market for mobile phones plunge since Apple Inc introduced the iPhone in 2007. Nokia, based in Espoo, Finland, booked a 772 million-euro charge for costs related to the joint venture in April, sending its shares to a 15-year low.
Asset Sales
Selling the BSS unit, which helps phone carriers manage charging and billing, would be the latest in a string of asset sales. Nokia Siemens, created in 2007, completed the sale of its microwave transport business to DragonWave Inc. in June and finished the sale of its fixed line broadband access business to Adtran Inc in May.
A decline in demand, along with intensified competition in a crowded marketplace, is hurting providers of network gear worldwide. The slowdown has even hit Asian manufacturers that previously grew rapidly thanks to the build-out of high-speed mobile networks in emerging countries. Huawei Technologies Co and ZTE Corp, China’s largest network suppliers, last month reported declining profits.
Nokia Siemens had an operating loss of 227 million euros in the second quarter. Analysts at Nordea Bank AB predict the business will lose 127 million euros, before interest and taxes, in the three months through September.
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