back to article Nokia Siemens Networks plans to flog bonds, raise €700m

Nokia Siemens Networks is planning to go to the public markets to try to get some financing through high-yield bonds for up to €700m (£580m, $930m). The telecoms equipment firm will be hoping that there’s enough investor appetite to make its bonds a good buy, meaning that some folks reckon the company is worth betting on. …


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  1. A Non e-mouse Silver badge

    NSN would be issuing the bonds this spring and would use the money raised to pay off some debts

    So they're borrowing money to pay off other debts. What could possibly go wrong ?

  2. S4qFBxkFFg


    "high-yield bonds"

    Not with somebody else's ten-foot pole.

  3. This post has been deleted by its author

    1. dogged

      If NSN had anything to do with handsets, you'd have a point.

      But they don't. So you don't.

      So perhaps your "clueless wanker" is you.

  4. Kevin Pollock

    As others have pointed out, this isn't's the jont venture created in 2006 between Siemens Communications and Nokia's Network Business Group.

    They are deeply in debt, with falling sales and are making a loss.

    Late last year they announced they were selling NSN's Optical Division to Marlin Equity Partners. This was a distressed sale because the optical business unit had been on the market for over two years and there were no takers. Th terms of the acquisition wre not disclosed - that's how little money NSN made from the sale. One of the problems is that, thanks to the former Siemens unit, there are huge pension liabilities that make an aquisition of NSN Optical unattractive. My guess is that Marlin will strip away the liability of those German employees with big pension entitlements by changing their contracts. Once they've stripped away the liabilities then they might be able to unload the company to Juniper (who have a technology partnership with NSN). While this is happening the development of the NSN Optical products is stagnant, which means that by the time they are bought the products will be obsolete.

    The next asset to be sold will be the Carrier Ethernet division (maunlt former Atrica Networks). As a US aquisition there aren't the same liabilities as for the optical division.

    But once these two assets are sold then the cupboard is looking pretty bare for any kind of growth business. There are the service teams, which should be profitable on their own. But services is a diminishing business when the manufacturing portion dies out.

    IMHO NSN in the current economic climate is a dead man walking - rather like Alcatel Lucent.

    1. Andus McCoatover

      No surprise Simon Beresford-Wylie...

      ...chose to "Light the blue touchpaper and retire". He knew he'd buggered up, so he buggered off. Not the action of a man who is captain of the ship. Unless Nokia Siemens Networks got renamed to Costa Concordia.

  5. Gonzo_the_Geek

    Considering some of the NSN people I've been unfortunate enough to have to work with, their strategy of paying peanuts and getting monkeys has not paid off. I'm sure that there are good engineers employed by NSN, I might just have been unlucky to have had dealings with the laziest and most clueless, but using someone with little or no Unix knowledge to manage a Unix farm and network engineers who don't know what snoop or tcpdump are is not the winning strategy they though it to be.

    But if people want to throw good money after bad, that's their business....

    1. Andus McCoatover


      Gotta agree - top hat!

      Bloke I worked with once on a basestation for Nokia Networks - later NSN stunned me.

      He had 2 MSC's (Physics and maths) - that's why they hired him.

      One Friday, one of our colleagues was leaving, so we had a leaving spasm for him. This bloke (the colleague, not the wise, leaving bloke) designed frequency synthesisers. He was good. OK, good-ish. Now, do remember I've never darkened the doorway of a university in my life.

      Our desk phones then were 'tethered' to our mobes. "Coming, mate?"

      "Yeah". "Bring your mobe with you"

      "Er....andus...will it work that far away....."

      Took ages to get the gravel from my forehead, as I was studiously impersonating a muslim on the M4.

  6. Andus McCoatover

    Insider....ousider now.

    We (The Royal "we") designed a product, mainly for use in airports. I think it was called "UltraLight" or similar, it relied on light transmision from the central basestation(BTS) to mini-BTS's so folks could get 2G coverage in an airport.

    IIRC, they

    1. Anonymous Coward
      Anonymous Coward

      Re: Insider....ousider now.

      Hahahah, so true, how many products has NSN created where a big fuss was created to sell it and they sell only a few, they usually have to recall the product or discontinue it and then lose even more business.

  7. Anonymous Coward
    Anonymous Coward

    You have to be very uninformed or stupid to believe the NSN story


    I read most of the posts and agree with most of them, except the one where they confuse NSN with Nokia. NSN does not make handsets and Nokia is also in trouble using a windows platform, unless of course you wish to reset your phone every day or more.

    NSN is, and has been, losing money to the tune of over 1 Billion Euro's per year. Their strategy is to outsource all of the local jobs to India. Might work except they use a 3% inflation rate for India and its actually 12% reported and over 20% in reality. The employee churn is so high, 50% or more, that once the employees are trained for the job, taking several months or more, the employee leaves to a better position paying just above what they are making at NSN. Could be less than 1 Euro per hour, or week even, and the trained employee is lost forever, unless NSN pays 1 Euro more than the other company and they come back and they are trained all over again.

    The total cost is enormous and the business case internally is completely flawed due to the incorrect financial calculations.

    To add to the mess, the company outsourcing has to talk to the Indian call center, or GNOC, who is not trained and makes low wages compared to their previous employees who were laid off as part of the outsourcing. Nothing gets done, no one understands you, and the end customer suffers from poor quality.

    Not only that, the employees that were laid off come back as high paid contractors to support the business that the outsourcing did not satisfy and they must then recover the account with no real accountability to the costs incurred. They need to save the account, try to satisfy the customer, and hopefully recover the costs that they cannot really determine because the overall costs are now spread across many countries and many other department budgets who are all trying to save money.

    So, with that picture painted, cost controls are then applied so no one can hire anyone unless it is approved by the CEO himself, or an internal candidate is to be transferred to the job required.

    All of the good people, as mentioned above, have been laid off because they cost too much or they are considered too stupid, even though they are not, to grasp the concept of the NSN business model that does not work. In reality, they understand the model all too well and come back making much more money as consultants, thus adding to the increases in cost and the spiraling uncontrolled recovery of the account.

    Internally the business case must be more than 50% cheaper than the operators costs before out sourcing to present a savings to the company and then make the margins. The savings must be at least 20% and the margins are 20%. The reality is that in order to obtain the 20% or more offered savings, the real margin is negative in the first year or two and at most 8% ongoing.

    Since the executives will not approve a business case with 8%, the people who create the business case create the business plan according to the 20% rule. Well, it does not work after approval to the executives surprise and then have to recover, making the plan negative for longer than if they did it correctly to begin with. The account over 5 years is negative and they hope to renew the contract to get to the 8%, by then it is a "Must have" business case and is approved assuming the client wishes to renew. By then all of the competitors, Ericsson, Alcatel, Huawei, and others, cut the rate even further making the margin negative again until they can outsource more, remember India has a 12% - 20% inflation rate, and get rid of more high paying executives and contractors on the project. They renew the contract, lay off the expensive contractors and the next tier of expensive employees, outsource more, and then have to recover the contract again.

    So with that, how would they ever make a profit with the current NSN model outsourcing to India. India is now outsourcing to North Africa, the Philippines are much more cost effective and can talk, and think, in many languages without the user even knowing. Much different than India, where they read a script and do not attempt to think on their own for fear of being fired. NSN does not use the Philippines since their main call centers are in India and the internal business model indicates that it will cost a fortune to transfer.

    NSN continues to lose money, spiraling out of control, believing their model works and selling the outsourcing model to more unsuspecting clients thinking it will be cheaper and higher quality because NSN has expert experience so they must know what they are doing..... Surprise!!!

    I would bet on the downside of NSN and make a lot of money due to the continued drop in stock value. They already took Billions of Euro's from their Parent companies Nokia and Siemens and they refuse to put more money into the losing joint venture that they disposed so that their profits would not be drug down by the businesses in the Joint Venture.

    Dont buy the story from NSN, they have no clue at the executive level of what is really going on and are not even connected to the entire story. Just looking at the fragmented business they created and trying to put the entire story together, but cannot. So they invent a story that looks good to the public and asks for more of your money to pay for their salaries and bonuses in a loosing venture.

    Invest your money in their competitors, Ericsson and Alcatel, they will eventually buy the customer base at pennies on the dollar.

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