Nokia denies investment troubles for ailing telecoms partnership

Nokia has played down speculation that the company is struggling to find buyers for part of its share in Nokia Siemens Networks (NSN) on the back of widespread financial difficulties.

Nokia is said to be looking to sell off part of its investment to help remove another financial burden as the handset maker focuses on the smartphone market, but buyers appear unwilling to get involved.

However, in a statement, Nokia dismissed such suggestions, arguing that it is in a strong position in the market and will push ahead with its roadmap for future growth.

"Multiple options continue to exist for NSN. That NSN has attracted interest is no surprise when considering the huge amount of innovation at the company and its financial results," Nokia said.

"NSN has been executing a turnaround and we're pleased with progress. We remain focused on our plans to strengthen NSN's competitiveness even further."

Bettina Tratz-Ryan, research vice president at Gartner, told V3.co.uk that, while NSN is facing challenges, it is not the only telecoms firm having financial problems and that it has the potential to recover over time.

"The lack of investment is a common issue for telecoms vendors and is not exclusive to NSN. Although it looks like NSN is struggling at the moment, investment in the right areas is likely to see it rebound," she said.

"NSN global services and software is generating 50 per cent of revenue at present, ahead of the hardware division. This area is becoming increasingly important and will be a key driver for future growth."

Leading vendors such as Ericsson, Huawei and Alcatel-Lucent will also need to look at their strategy as they still rely primarily on their hardware and infrastructure business, Tratz-Ryan added.

NSN had a difficult 2010, losing ground to these vendors and others such as Cisco, and posting an operating loss of €686m.

NSN acquired Motorola's wireless network infrastructure assets for $1.2bn (£786m) in July 2010 in an attempt to boost its US and Japan market shares.