Nokia Siemens Networks sells optical networking business

The network vendor continues to shed units as it wants to concentrate on mobile networks

Nokia Siemens Networks is selling its optical networking business unit to private investment firm Marlin Equity Partners, the latest in a series of sell-offs as the vendor concentrates on mobile broadband networks.

The two companies didn't announce any financial details of the deal, but the deal will result in the Optical Networks business unit becoming an independent company, according to a statement from Nokia Siemens published on Monday.

As a result of the transaction, up to 1,900 employees from the optical business unit and related functions are expected to transfer to the new company. They are mostly based in Germany, Portugal and China, the statement said.

The planned transaction is another step in the transformation of Nokia Siemens Networks into a mobile broadband specialist.

Earlier this year the company closed the sale of its IPTV assets to Belgacom and Accenture; its microwave transport business to DragonWave, and the fixed line Broadband Access business unit, associated professional services and network management solutions, to Adtran.

The focus on mobile broadband seems to have helped Nokia Siemens turn a corner.

Helped by operators commercializing LTE in Japan, it passed Alcatel-Lucent to become the number-two LTE vendor during the third quarter by revenue from radio access networks, according to market research company Dell'Oro Group.

Ericsson was the largest LTE vendor, Dell'Oro said.

Also, Nokia Siemens' net sales increased by 3 percent year on year during the third quarter, and last year's third-quarter operating loss of ¬114 million (US$148 million) became a ¬182 million operating profit in the same period this year, Nokia reported.

Nokia Siemens' optical networking unit mainly sells DWDM (dense wavelength-division multiplexing) equipment, which is used in operator backbone networks. Its competition includes the likes of Alcatel-Lucent, Ciena, Cisco Systems and Huawei Technologies.

The new optical networking company will be headquartered in Munich, Germany. The transaction is expected to close in the first quarter of 2013.

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Mikael Ricknäs

IDG News Service
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