DUBAI.- Nokia Siemens Networks (NSN) said on Monday it had reassured customers over the merger that created the telecom equipment maker, after uncertainty dented sales in the second quarter.
April-June sales at the network equipment venture, owned equally by Nokia and Siemens, fell more than 10 percent, both from the first quarter and a year earlier.
Some of the total of about 600 customers of the joint venture, formed on April 1, were cautious about placing new orders until they had more details of the company’s product portfolio and strategy, Simon Beresford-Wylie said.
“The sales were very disappointing … there was an element of caution among customers,” he told Reuters in an interview. “In some instances we saw there were delayed purchase orders.”
The world’s second-largest mobile networks company after Swedish rival Ericsson, Nokia Siemens has been able to retain most customers, despite aggressive price cuts at Ericsson, Beresford-Wylie said.
Restructuring programs at newly merged Nokia Siemens and Alcatel-Lucent gave Ericsson the opportunity to steal market share by undercutting prices, analysts have said.
“They’ve been knocking on doors with very aggressive offers,” Beresford-Wylie said. “But I think we’ve given customers a lot of clarity now about the portfolios and reassured them.”
The NSN chief met clients in Russia, India, China, as well as countries in the Middle East, Latin America and Europe in the last two months to discuss the venture.
Nokia and Siemens merged their networks business partly to be able to weather periods of slow growth better by sharing high fixed costs for research and development and reducing overheads. NSN plans to cut 9,000 jobs as part of plans to save 1.5 billion euros ($2.05 billion) a year.
“I’ve been asking everyone to tell me how the integration is going. I think we are in really good shape on this front now,” he said in an interview in Dubai.
Beresford-Wylie said the firm could consider acquisitions in future but declined to comment on a July report on Web site TheStreet.com that U.S. telecommunications equipment maker Tellabs was entertaining a $7 billion bid from NSN.
“We have a lot on our plate at the moment with integration,” he said. “I wouldn’t expect you are going to wake up any time soon and read about anything big.”
NSN’s decision last month to base its services business unit in India was part of a larger plan to focus on emerging markets, which will account for 50-60 percent of cell phone users in 2015, Beresford-Wylie said.
About 1.4 billion of the world’s three billion cell phone users are now in China, India and Latin America, he said. Most of the two billion people expected to start owning cell phones in the next eight years would come from emerging markets, including those in the Middle East and Africa, he said.
Nokia, the world’s top cell phone maker, said in August India overtook the United States in the second quarter to become its second-biggest market by sales after China.
“Basing our business unit in India is a very important step we are taking in order to actually change and transform our DNA,” Beresford-Wylie said. “In the past, people have looked at India and China as a way of reducing costs. Now, it is about being close to the market.”