Nokia Siemens to close services unit -sources

FRANKFURT/HELSINKI Tue Dec 4, 2012 5:56pm IST

The logo of the telecommunications services company Nokia Siemens Networks is pictured on top their office in Berlin October 9, 2012. REUTERS/Fabrizio Bensch/Files

The logo of the telecommunications services company Nokia Siemens Networks is pictured on top their office in Berlin October 9, 2012.

Credit: Reuters/Fabrizio Bensch/Files

Related Topics

Stocks

   
Polluted waters of China

Polluted waters of China

Growing cities, overuse of fertilizers, and factory wastewater have degraded China's water supplies to the extent that half the nation's rivers and lakes are severely polluted.  Slideshow 

FRANKFURT/HELSINKI (Reuters) - Nokia Siemens Networks' (NSN) services unit faces closure as an essential contract with Deutsche Telekom (DTEGn.DE) will not be extended, two people familiar with the matter said on Tuesday.

One person said the closure, effective en 2013 would be announced on Wednesday during a workers' meeting in Kassel.

NSN Services, which generates under 100 million euros in annual sales and employs about 1,000 people, ensures that calls and data are transmitted via overhead cable networks. Deutsche Telekom sold the unit to NSN five years ago.

At the time the two companies agreed on a 5-year 300 million euro services contract. The unit also counts Vodafone (VOD.L) as a customer.

The contract would not be extended, the person said.

German daily newspaper Sueddeutsche Zeitung first reported about the closure of the unit.

Verdi union representative Mike Doeding said that a meeting to update workers about next year's plans was scheduled for Wednesday, adding he had no idea about the message to be expected.

"If they are to close the unit it would be an outrage," Doeding said.

NSN declined to comment, while Deutsche Telekom referred to NSN for comment.

NSN, a 50-50 joint venture between Nokia Oyj (NOK1V.HE) and Siemens AG (SIEGn.DE), is cutting costs and plans to shed a quarter of its staff and sell product lines to focus on mobile broadband. NSN had 60,600 employees at the end of the third quarter.

The telecoms equipment market is going through rough times with stiff competition from Chinese peers Huawei HWT.UL and ZTE 000063.SZ as the major telecoms operators postpone investments, faced with shrinking markets due to the weak economy.

France's Alcatel-Lucent (ALUA.PA) is also cutting costs.

On Monday, NSN said it was selling its optical fibre unit to Marlin Equity Partners, resulting in the transfer of up to 1,900 employees, mainly in Germany and Portugal.

(Reporting by Harro ten Wolde and Maria Sheahan in Frankfurt, Tarmo Virki and Terhi Kinnunen in Helsinki; Editing by Ludwig Burger and Louise Heavens)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Tech Buzz

TECH SHOWCASE

E-Commerce in India

E-Commerce in India

Amazon says to invest $2 billion more in India.  Full Article 

'Gifts' Junked

'Gifts' Junked

Facebook to shut down Gifts service in latest e-commerce shift.  Full Article 

'Selfie' Phone

'Selfie' Phone

Microsoft gives employees sneak peek at new 'selfie' phone.  Full Article 

E-book Pricing

E-book Pricing

Amazon says lower ebook prices benefit authors, publishers.  Full Article 

MacBook Prices

MacBook Prices

Apple updates MacBook Pro laptops, cuts price of older model.  Full Article 

Spring Shoes

Spring Shoes

A new boot design to put a spring in your step.  Video 

BlackBerry Deal

BlackBerry Deal

BlackBerry buffs up security credentials with Secusmart deal.  Full Article 

Useful App

Useful App

Always misplacing keys, wallet? Lost and found apps may help.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage