North America bails NSN out in Q2, 2013

In Q2, 2013 NSN net sales decreased 14.7 percent year-on-year to reach Euro 2.76 million. On a sequential basis, net sales grew by 1.5 percent

The drop was partially due to divestment of some business as well as exiting of certain customer contracts and countries. The year-on-year decrease in mobile broadband was due to lower GSM and voice and IP transformation net sales whereas drop in global services was due to a reduction in network implementation activity, as some major network deployment projects near completion.

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Rajeev Suri, CEO, NSN said, “Our fourth consecutive quarter of strong profitability is testament to excellent performance in both our mobile broadband and global services segments. As a result of our focused strategy and strong financial position, we believe NSN is very well positioned to build on its leadership position in LTE as our customers build the next generation of mobile broadband networks.”

The sequential increase in global services net sales was primarily due to higher sales in customer care services and professional services, partially offset by lower network implementation activity.

The sequential increase in mobile broadband net sales was primarily due to higher WCDMA and GSM sales, partially offset by declines in LTE and CDMA sales. On a regional basis, NSN net sales benefited from stronger seasonal sales in Latin America, Europe and China. In Japan and North America, net sales declined sequentially due to the cyclical nature of carrier spending.

On a geographical basis, the year-on-year decline in net sales was primarily due to Asia, Middle East, Africa, Europe and Latin America. In Asia, Middle East and Africa, the year-on-year net sales decline was due to lower sales in Japan and Greater China. North America was the only market where the company showed positive growth and the company performed exceptionally well registering 22 percent growth.

In India, the net sales declined 23.5 percent year-on-year thanks to high inflation, slow pickup of 3G and non starter of 4G services. In Japan, net sales declined year-on-year following high wireless infrastructure deployment activity in the second quarter 2012.

In Greater China, the year-on-year decrease in net sales was due to constrained operator spending in anticipation of a technology shift to TD-LTE. In Europe and Latin America, the year-on-year net sales decline was related to network modernization and constrained operator spending in Europe.

Mobile broadband deal gained momentum as during the quarter NSN was selected by TIM Brasil to build its 4G LTE network ahead of the 2014 football World Cup. During the quarter, Ooredoo in Qatar launched 4G mobile broadband services and NSN also enabled 4G network for Claro Chile, a wholly-owned subsidiary of the America Movil group.

NSN was also chosen by AIS to roll out 3G services in Thailand to meet growing demand, M1 chose NSN for modernization of 3G network in Singapore;  We also completed the fourth set of interoperability testing of GSM-Railway (GSM-R) infrastructure with another European supplier against requirements specified by the European Union (EU).

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