Nokia Siemens Networks started operations on Sunday and immediately forecast ‘very slight’ market growth for the mobile and fixed infrastructure and related services in 2007. This was a downgrade from Nokia’s previous forecast of ‘slight.’
The third largest telecoms equipment maker said that over the last couple of months, there had been a narrowing of visibility and indications of a slowdown in spending in some regions.
This shows a clear divide amongst equipment makers, with the two largest players, Ericsson and Alcatel-Lucent, forecasting growth in the mid-single digits. On the pessimistic side, Nortel has predicted flat revenue while Nokia Siemens expected it will just creep forward from the 17.1bn euros ($22.9bn) achieved by the two separate operations in 2006.
CEO Simon Beresford-Wylie said the new company has a clear objective to become number-one in the industry. He said that bringing the internet and connectivity to the vast majority of people by 2015 would require finding new ways to lower the cost of connections, particularly in large emerging markets.
When the formation of the new company was announced in June 2006, it said it would seek estimated cost synergies of 1.5bn euros ($2bn) annually by 2010. Achieving this in the face of trades union opposition could provide tough but only Ericsson has been able to achieve productivity gains in recent years.
Nokia Siemens Networks, which has a 600-strong customer base, has five product business units: radio access, broadband access, service core and applications, IP/transport, and operations support systems. It also aims to cash in on the growing demand for services through its services business unit, which employs 20,000 people worldwide.