Nokia Siemens Networks

1

Summary :

1. Company Profile……………………………………………………………………………………………….31.1. Company description……………………………………………………………………………...31.2. Quality at Nokia Siemens Networks……………………………………………………………..3

2. Departmental Hierarchy………………………………………………………………………………………42.1. Board of directors………………………………………………………………………………….42.2. Executive Board……………………………………………………………………………………5

3. Global Presence……………………………………………………………………………………………….53.1. Serving customers around the world…………………………………………………………….5

4. Sustainability…………………………………………………………………………………………………..64.1. Company’s approach……………………………………………………………………………...64.2. Environmental sustainability……………………………………………………………………...84.3. Social sustainability………………………………………………………………………………..84.4. Managing sustainability…………………………………………………………………………...8

5. Partners………………………………………………………………………………………………………...9

6. Products………………………………………………………………………………………………………..9

7. Solutions………………………………………………………………………………………………………11

8. Services……………………………………………………………………………………………………….12

9. Customer Experience Management……………………………………………………………………….13

10. Latest launches and updates……………………………………………………………………………..13

11. Needs for your Business…………………………………………………………………………………..1411.1. Reduce costs and increase efficiency………………………………………………………..1411.2. Increase network capacity and coverage…………………………………………………….1411.3. Generate new revenue streams………………………………………………………………1411.4. Optimize customers’ experience……………………………………………………………...1511.5. Strengthen market position……………………………………………………………………15

12. Technology vision………………………………………………………………………………………….1512.1. Company’s Technology vision for 2020……………………………………………………...16

13. SWOT: Nokia Siemens Networks, Services, Worldwide………………………………………………1613.1. Analysis………………………………………………………………………………………….16

13.1.1. Introduction……………………………………………………………..……………1613.1.2. SWOT Analysis……………………………………………………………………..17

14. Implication for Company Being Profiled………………………………………………………………….22

15. Company Overview………………………………………………………………………………………...22

16.Reference……………………………………………………………………………………………………23

2

1. Company Profile

1.1. Company description

Nokia Siemens Networks is a leading specialist in mobile broadband, providing mobile networks and the intelligence and services to maximize their value. They are one of the largest telecommunications hardware, software and professional services companies in the world, operating in 150 countries with headquarters in Finland.

The company’s mission is to help operators to build more valuable relationships by improving efficiency and customer experience. Company’s customers are telecommunications network operators and service providers. A very small part of the business (approximately 0.4% of sales) is to military and civil defence organizations in selected countries where they supply communications equipment for administrative purposes.

During 2011 (the period covered by this report), they operated in three core areas:

• Network Systems: developing and producing network infrastructure products, including Flexi base stations and broadband access equipment• Global Services: implementing networks, and managing networks on behalf of customers • Business Solutions: helping customers provide services to improve the end user experience.

Nokia Siemens Networks. for a world in motion™

As the world’s specialist in mobile broadband, the company help’s to enable the end users to do more than ever before with the world’s most efficient mobile networks, the intelligence to maximize their value and the services to make it all work together. From the first ever call on GSM, to the first call on LTE, company operate’s at the forefront of each generation of mobile technology. Company’s global experts invent the new capabilities that clients need in their networks.It provide’s the world’s most efficient mobile networks, the intelligence to maximize the value of those networks, and the services to make it all work together seamlessly. With an unswerving focus on quality, efficiency and reliability the company help’s clients meet mobile customers’ demands for universal content and connectivity more efficiently and effectively. The company deliver the innovations in mobile technology that enable people and businesses everywhere to do more than ever before. As a mobile operator, clients face challenges from many sides that put their mobile network and business model under extreme pressure.

1.2. Quality at Nokia Siemens Networks

What does quality mean at Nokia Siemens Networks?

For the company, quality is simply about putting the customer at the centre of everything , not only in technology and services, but also in our behaviours.

3

The company put’s quality into practice every day through three quality principles that sum up the Nokia Siemens Networks way: Customer First, Execution Excellence and I Own Quality. These principles, along with the aspiration of our talented people to be the best-in-class, are forming the unique foundation of Nokia Siemens Networks’ quality DNA.

Nokia Siemens Networks is built on solid quality principles

Customer First encourages employees to adopt ‘outside in’ thinking and to focus on the needs of the customer, rather than looking inwards at ourselves. It implies carrying the voice of the customer inside the organization to collaborate across functions. Ensuring that the impact on the customer is understood fully and that we are delivering high quality products, services and solutions to maximize the investments customers are making with the company.

Execution Excellence is about doing it right the first time. With this the company mean proactive quality through early detection and containment.

“I Own Quality” means that every Nokia Siemens Networks employee takes personal responsibility on a daily basis for their actions and decision making to achieve high quality for customers.

Nokia Siemens Networks is undergoing a transformation

The company focuses it’s strategy on mobile broadband and services. That’s an addressable market valued at almost €70bn in 2011, and where it hold’s a strong second position.

This means building on it’s existing success in mobile broadband and customer experience management - all supported by a strong services organization with highly efficient global delivery.

They are maintaining high levels of R&D investment in key segments; in fact, their investment in innovation around mobile broadband is expected to increase. In addition, quality remains a priority and is another area where we will be spending more.

By placing mobile broadband and services at the heart of what they do, our goal is to provide the world’s most efficient mobile networks with the intelligence to maximize the value of those networks and the services capability that makes it all work seamlessly.

The company’s aim is to improve their long term competitiveness and profitability.

2. Departmental Hierarchy2.1. Board of directors:

Executive Chairman: Jesper Ovesen Jesper Ovesen is Executive Chairman of the Board of Nokia Siemens Networks.

Other members of the board:

Peter Y. Solmssen Peter Solmssen is also Head of Corporate Legal and Compliance and Member of the Managing Board and General Counsel of Siemens AG

Timo Ihamuotila Timo Ihamuotila is also Executive Vice President, Chief Financial Officer of Nokia

Joe Kaeser Joe Kaeser is also the CFO of Siemens

Barbara Kux Barbara Kux is also Member of the Managing Board and Chief Sustainability Officer of Siemens AG

Juha Äkräs

4

Juha Äkräs, Executive Vice President, Human Resources of Nokia Louise Pentland

Executive Vice President, Chief Legal Officer. Nokia Leadership Team member since February 11, 2011. Joined Nokia 1998.

2.2. Executive Board:

The executive board is leading the company’s transformation announced on November 23, 2011.

Rajeev SuriChief Executive Officer (CEO)

Marco SchröterChief Financial Officer (CFO)

Alexander MatuschkaChief Restructuring Officer

Samih ElhageChief Operating Officer (COO) and acting head of Global Services

Ashish ChowdharyAsia, Middle East and Afric

René Svendsen-TuneEurope and Latin America

Hans-Jürgen BillHuman Resources

Barry FrenchMarketing and Corporate Affairs

Hossein MoiinTechnology and Strategy

Joyce NorciniLegal and Compliance

Herbert MerzOptical Networks

Marc RouanneMobile Broadband

3. Global Presence3.1. Serving customers around the world

Regional organizations are a key part of supporting their customers. These organizations ensure that services are delivered and executed as agreed with the customers.

Our regions:- Asia Pacific - Middle East & Africa- Greater China - North America- India - North East- Japan - South East Europe- Latin America - West Europe

4. Sustainability

5

Nokia Siemens Networks’ mission is to grow our business sustainably. The company will do that by behaving ethically and being responsible employers, by helping their suppliers and customers be more sustainable, and by working with wider stakeholders on global challenges facing the planet.

4.1. Company’s approach

They aim to be honest and transparent as they seize opportunities to grow a sustainable business and meet their obligations to people and the planet. Their sustainability strategy is to support the business by meeting stakeholder expectations, minimizing their impacts and maximizing positive contribution. They focus on three key stakeholders: employees, customers and planet.

Good housekeeping

They respect all relevant laws, regulations and international standards. More than that, they aim to create an organization where ethical business practice is a source of pride and employees have a safe, motivating working environment. The company’s Code of Conduct is central to operating responsibly. It is reinforced with mandatory annual training for every employee and supported by detailed policies and guidelines. They also have strong management systems in place covering anti-corruption, human rights, labor conditions, occupational health and safety, and environmental protection standards. Their own operations have a relatively small environmental impact but they have ambitious goals to improve the environmental efficiency of their facilities, IT services, travel and service fleets.

Sustainable value for customers

They extend the high demands they put on theirselves to their suppliers. They also work closely with customers to improve the safety of all workers involved in higher risk tower building and installation works. But they can do more. They put a lot of effort into helping customers reduce their environmental footprint. As well as the industry-leading energy efficiency of company’s base stations, they provide solutions to optimize energy consumption in the entire network.

A good neighbor

The company want to contribute broadly to the communities where they operate and employ people. They do this by minimizing any adverse environmental effects of their operations and by connecting with local communities.

Positive impacts on the planet

The greatest contribution the company can make to sustainability is to use their technology to benefit communities and the environment. Telecommunications is in a unique position to drive social and economic progress while helping to reduce the environmental impacts of many industries. For example, they are working with partners to deliver machine-to-machine (M2M) solutions as well as to save energy in telecoms networks. Additionally, they recognize their responsibility to carry out due diligence so that their communications products are used to support and not infringe human rights.

Commitments

Nokia Siemens Networks is a member of the United Nations Global Compact and they are committed to its Principles. Company’s annual Sustainability Report is their Communication on Progress. Nokia Group, including Nokia Siemens Networks is included both in Dow Jones Sustainability Index (“Technology Supersector Leader” in 2009 and 2010) and in FTSE4Good. They want to maintain an active and open dialogue, engaging widely to find new and better ways to serve stakeholders and improve their performance.

6

Code of conduct

The Nokia Siemens Networks Code of Conduct outlines their commitment to high ethical standards.The Code covers:

Human rights They will respect the rights laid down by the United Nations’ Universal Declaration of Human Rights, including:- Freedom from discrimination on any grounds- Freedom from arbitrary detention, execution or torture- Freedom of peaceful assembly and association- Freedom of thought, conscience and religion- Freedom of opinion and expression.

Ethical conduct They are committed to the highest standards of ethical conduct and full compliance with all applicable national and international laws, including issues such as:- Labor conditions- Antitrust and promoting fair competition- Prevention of bribery and corruption- Good corporate governance- Protection and recognition of copyright, company assets and other forms of intellectual property- Privacy and data protection.

Environment They are determined to be environmentally aware in all they do, going beyond compliance by improving the environmental performance of their operations and throughout the lifecycle of their products.

People They are committed to provide a safe and healthy workplace where all employees are treated with respect and provided with equal opportunities for development.

Anti-corruption They have strict zero tolerance on corruption. Employees must avoid any activity that can lead to a conflict of interest, including:- Gifts and hospitality- Bribes and facilitation payments- Political donations.

Partners They require their business partners and suppliers to comply with all applicable laws and regulations, and encourage them to go beyond compliance to improve their management of ethical, environmental and social issues.

Implementation How the Code is implemented in practice, how potential violations are reported and investigated.

4.2. Environmental sustainability

Their aim is to save energy, water and other resources, reduce greenhouse gas emissions and protect the environment. This means improving the performance of their own operations, but also

7

helping customers do the same. They have set challenging targets to cut greenhouse gas emissions from their operations and their base station technology leads the market in energy efficiency.

There are three strands to their strategy:

Operating more efficiently Designing products and services with the environment in mind that help telecoms operators

reduce energy consumption in their networks Delivering solutions that facilitate a net positive impact.

All of these are important. But the biggest impact will come in applications beyond the ICT sector, where around 98 percent of energy is used globally. To realize the potential, they are working with customers to provide smart applications such as electricity grid management that will help to create a low carbon economy.

4.3. Social sustainability

Communications technologies stimulate social and economic development. They do business ethically and aim to ensure they have a positive influence on their employees, their partners and the communities they work in.

4.4. Managing sustainability Their business is changing and they have revised the way that company govern and manage sustainability to ensure an effective approach to environmental and social matters.

Governance

In 2011 they simplified their approach to sustainability governance. Instead of a separate Corporate Responsibility Steering Group, the Executive Board now acts as a Steering Group for sustainability matters. Board members are responsible for leading the business through the transformation announced in November 2011 and their continued senior oversight confirms the role of sustainability in the company.

The Executive Board reviews sustainability performance at least once a year, and provides guidance. The Head of Marketing and Corporate Affairs is the board member directly responsible for sustainability.

8

Executive board

Management

In 2011 the company developed a new management structure for sustainability to improve the efficiency and communication of existing networks and working groups for environment, health and safety and ethics. The emphasis is on operating effective management systems which support the business, meet regulatory requirements and stakeholder needs. Two cross-functional forums co-ordinate sustainability activities across the company – one for Sustainable Products and Services and another for Sustainable Operations. They bring together sustainability experts, business units and functions such as HR and IT from each region to develop and implement our sustainability strategy. Through these forums, they will listen and respond to the needs of their stakeholders, define sustainability goals and key performance indicators and continue to implement global management systems. In 2012, the two forums will be supported by working groups formed of sustainability experts from within the business.

5. Partners

Performance from partnering

The company believe’s partnering drives innovation and enables new business opportunities creating added value for all parties, especially for their customers. Whether engaging with partners to address new market segments, build joint solutions, complement and differentiate their offerings or strengthen customer service, each of these relationships combine their leading technology, expertise and capabilities with that of other industry leaders.

6. Products

Customers can get the latest technology and global expertise at their fingertips to help them meet the growing demands of their customers.

9

Handle the growing volume of traffic on their networks and stay relevant in the rapidly changing industry landscape is a big challenge. On top of that, they have to manage their operations and keep track of the business. Whether it’s the latest network technology, company’s tools to help customers manage their business more efficiently, company’s products can help customers to stay competitive and increase revenue.

Business units

Since 1 January 2010, Nokia Siemens Networks has organised its operations within the following three business units:

Business Solutions (BSO) Network Systems (NWS) Global Services (GS)

There are dedicated sales units for each of these areas.

Products and services: Business Communication for Service Providers

- Customer care support - Mobile backhaul- Device management - Mobile TV- Fixed-mobile convergence - Outsourcing- Hosting - Unified charging and billing- Integrated provisioning - WCDMA frequency refarming- Inventory management - Optical multiplexers - IPTV - Surpass hiT

Public and corporate Air and maritime Government Railway

What can Nokia Siemens Networks offer?

> Business Support Systems (BSS)Converge charging and billing for more flexible, personalized offers.

> Convergence/ IMSPave a smooth evolution path towards an all-IP core with IMS as the core controller of choice for LTE networks offering voice and multimedia services.

> Customer Experience Management (CEM)Gain a holistic, real-time view of your subscribers, and turn this insight into targeted actions that improve the customer experience and drive loyalty and profitability.

> Dedicated networksSupport mission-critical operations in industries with reliable voice and data communication services

> Evolved Packet corePrime customers networks for the explosion in data and signalling traffic in mobile networks.

> IP Partner productsLeverage the right skills, partners and solutions to support customers IP transformation process.

> Mobile broadbandCompany can help you make sure your networks can efficiently handle increased data traffic as well as improve the experience for customers.

10

> Operations Support Systems (OSS)Smart OSS helps you use network to ensure better customer experience in a cost-efficient way.

> Transport networksGet the fastest connections across fixed and mobile environments to efficiently manage explosive traffic growth.

7. Solutions

As customers become increasingly demanding, the company will work with them to develop the solutions that keep them satisfied Whether it’s optimizing customers mobile and fixed network, providing a rich multi-media experience for their customers or adopting new technologies, they are facing challenges on many fronts. Company can help customers turn these challenges into business opportunities. Company’ solutions draw on a end-to-end range of products and services. They can support customers as you adapt to the changing communications landscape, meet the rising demands of their customers and take a step ahead of the competition.

What Nokia Siemens Networks can offer?

> Carrier Ethernet Transport (CET)Move easily to a cost-efficient packet transport network.

> Customer care automationIncrease customer satisfaction with our automated care solution.

> Device managementEnsure a superior customer experience with automated device management and reduce your support costs.

> Heterogeneous networksMeet differing network coverage and capacity requirements with our Heterogeneous Network solution which deploys a mix of technologies, frequencies, cell sizes and network architectures to optimally respond to rapid changes in customer demand.

> Mobile backhaulIncrease the capacity of your mobile network and make sure you can meet the growing traffic demand for data services.

> Mobile site connectivityMaintain traffic segregation and resilience while cost-effectively connecting the mobile elements to your IP network.

> Multilayer optimizationOptimize your transport networks and cut operational costs.

> Multiservice IP backboneWe have the only IP backbone solution to integrate the best of Cisco Systems and Juniper Networks. Ensure reliable end-to-end quality of service.> Network sharingCut the cost of delivering mobile broadband and get your service to market quicker.

> Quality of service differentiation

11

Manage peak-time network congestion and improve the experience for your customers. Prioritize data traffic in real-time during busy and congested periods.

> Self-organizing networksCut your operating costs by automating manual processes across GSM, 3G and LTE.

> Smartphone friendly networksPrepare your networks for a surge in smartphone use and ensure a high level of service.

> Subscriber data managementTurn your subscriber data into valuable business insights.

> Voice over LTEVoice over Long Term Evolution ensures profitable high quality voice, video and multimedia service.

> WCDMA RefarmingExtend and improve your 3G services without having to invest in new sites. Increase network efficiency by improving indoor coverage and offering rural mobile broadband to reach new users.

8. Services

The company’s global expertise and experience can help customers develop and manage their business to meet the needs of their customers. The company know’s no two operators are the same, and the challenges customer face’s can be quite different from his competitors. That’s why the company always make sure its services are tailored to customer specific needs. Whether it’s outsourcing part of customer operations or upgrading his network security, customer will benefit from the input of its experts around the world as well as the best in local insight and understanding.

What Nokia Siemens Networks can offer?

> Network planning and optimizationMaximize your network’s potential and deliver a better service to their customers while reducing expenses and increasing revenues.

> SecurityTheir customers trust it with their data, so keeping it secure is vital to the business.

> Systems IntegrationThey will work with you to establish the business goals, and deliver systems integration to help them realize them.

> Network implementationNeed to upgrade or expand your network? We can do it for you quickly and cost-effectively

> Managed energyMake the most of your energy services through the use of our strategic partnerships.

> Managed servicesWe’ll take care of your networks, end user services and customer interface related processes so you can focus on what you do best – keeping your customers happy.

> Care servicesWe can help keep your customers connected to the network by providing care and support and even predicting where problems could occur and helping prevent them.

12

> Training and learningEmploying the right people with the right skills is at the heart of your business. Realize the full potential of your people and upgrade your business with our tailored training solutions.

> Global service deliveryWe’ll work 24/7 at our locations around the world to deliver a fast, efficient roll-out of your new service or operation.

9. Customer Experience Management

Turn deep insight into targeted actions that improve the customer experience and drive loyalty and profitability. Today’s mobile customers demand the highest possible standards of excellence from their operators. 40% of them are prepared to switch operators within 12 months if they don’t get the experience they demand. Replacing lost customers is a costly task, hitting operator profitability significantly. Customer experience management is about driving loyalty, efficiency and revenue streams. For subscribers, it is the key to a much more immediate, relevant and personalized customer experience. This is achieved by generating insight about customer experiences and preferences based on the existing data in your network and IT systems, and using it to make clearly prioritized improvements that result in a better customer experience and business outcome.

What can Nokia Siemens Networks offer?

Nokia Siemens Networks is the leading CEM vendor, offering a wide portfolio that brings together pre-integrated software products and related professional services across network and IT infrastructure as well as throughout the entire customer lifecycle. Our offering also includes our award-winning CEM on Demand, an easy-to-use portal that enables a phased approach to CEM, ensuring value on each step of the way. Operators across the globe are already using Nokia Siemens Networks CEM tools to improve the customers’ experience.

10. Latest launches and updates

In the new engagement economy, mobile broadband traffic is growing exponentially as people connect to their contacts, applications and services on their mobile phones.

By 2020, mobile networks will need to be ready to deliver one gigabyte per user per day, downloaded at speeds more than ten times the current level. Watch for news from the world’s mobile broadband specialist about how to meet #1GBperday$ demand and make money from it.

13

11. Needs for Business

Whatever the business objectives, Nokia Siemens Networks can help to achieve them with exactly the right combination of products, services and solutions.

11.1. Reduce costs and increase efficiency

With the customers demanding more services and higher network quality, you have to do more and more to satisfy their expectations. This can be costly as new operations come on-stream or new networks are put in place to handle increased traffic. Nokia Siemens Networks can help you reduce operational expenditure (OPEX), limit capital expenditure (CAPEX) and turn low value customers into profitable ones.

Mobile backhaul solutionFuture-proof your mobile broadband network and limit CAPEX

NetActCheck out our industry-leading OSS

Customer Care Automation solutionMaximize the efficiency of customer care

11.2. Increase network capacity and coverage

The growth in smartphone and tablet use has put a strain on traditional networks, and with customers using more services it is vital to meet the demand. Nokia Siemens Networks can help to increase network capacity for high-data applications such as video, extend your network coverage, step up operations and plan for the migration to IP-based technologies.

Network sharing solutionReduce costs and boost your deployment of mobile broadband networks

NetAct Optimizer productFind out more about managing complexity with automated optimization

Network Planning and Optimization servicesLearn more about maximizing your network’s potential

11.3. Generate new revenue streams

The boom in mobile broadband and interactive services certainly provides challenges, but there are also business opportunities. Nokia Siemens Networks can support you with new voice and data products as you strive to increase revenues from broadband networks. The company can also help to develop new business models with new services, social media applications and TV-related content.

Voice over LTE (VoLTE) solutionDeliver profitable high quality voice, video and multimedia service to your customers

New share@once product suiteTake customer self care to the next level

Revenue Capture serviceIdentify and exploit new revenue opportunities

11.4. Optimize customers’ experience

In such a competitive marketplace, the quality of customer experience is increasingly what matters. Nokia Siemens Networks experts can provide with practical insights about customers and help make the relevant improvements. The company can help to drive customer loyalty, increase customer care and pull in new customers.

Smartphone friendly networks solution

14

Make sure mobile broadband network delivers the best for customers Customer experience management product portfolio

Turn deep insight into targeted actions that improve the customer experience and drive loyalty and profitability

Customer insight and experience consulting serviceTake advantage of customer experience consultants to drive customer loyalty and win profitable customers.

11.5. Strengthen market position

The whole telecoms landscape is changing. Cable and mobile operators are not just crossing over into each other, but media companies, consumer electronics companies and over-the-top players are competing for your customers. Whether you want to extract more value from a mature market or grow market share in a developing country, we have the expertise to support you.

Heterogeneous NetworksNokia Siemens Networks can help to manage a complex set of networks as one single network, with superior customer experience

Serve atOnce Intelligence productGather and correlate data in real-time from a multitude of sources

Managed servicesSimplify your operations and focus on the core of business to offer a better experience for customers.

12. Technology vision

Nokia Siemens Networks is the world’s specialist in mobile broadband. From the first ever call on GSM, to the first call on LTE, theyoperate at the forefront of each generation of mobile technology. We help our customers meet the demands of a world seeking universal connectivity and content. They deliver the innovations in mobile technology and services that enable people and businesses everywhere to do more than ever before.

12.1. Company’s Technology vision for 2020

Mobile networks are able to deliver one Gigabyte of personalized data per user per day profitably Therefore mobile networks need to undergo a fundamental transformation. The key requirements are:

Support up to 1000 times more capacity: higher spectral efficiency, more spectrum and small cells are needed.

Reduce latency to milliseconds: bandwidth, proximity and control will solve the latency challenge.

15

Teach networks to be self-aware: cognitive networks can autonomously handle complex end-to-end network and service management.

Reinvent the Telcos for cloud: software defined networks for an end-to-end virtualized service delivery.

Flatten total energy consumption: efficient radio technologies, high utilization and network modernization will flatten network energy consumption despite traffic growth.

13. SWOT: Nokia Siemens Networks, Services, Worldwide

13.1. Analysis13.1.1. Introduction

Communications service providers (CSPs) are under pressure to reduce operational costs and take complexity out of networks, while simultaneously improving revenue and the end-user experience. Network functions that do not directly impact the customer interface, such as building and maintaining networks, can be (and have been) handed over to third parties — with a relatively low risk and a good cost savings-based business case. Network equipment providers (NEPs) in particular have been able to position themselves well in this space. They can leverage their technology experience and scale to beat CSPs' own performance in cost or key performance indicators; for example, reductions in "break fix" timing. Europe, alongside the Asia/Pacific region, has been the leading market for these activities, and CSPs have found network rollout and system integration (SI) services from NEPs to be the fastest and most effective way to build their networks. NEPs would like to expand their services to full network management and the IT or service layer of networks — including operations support systems (OSSs)/business support systems (BSSs) and end-user application-facing tasks — preferably in a longer-term managed services model. However, it has so far been difficult for NEPs to convince CSPs to make this change. This strength, weakness, opportunity and threat (SWOT) analysis is one of a series of four reports assessing the outsourcing approaches of NEPs. Vendors are included in this series based on their market shares for CSP technologies, as well as the rapid growth of services revenue as a part of overall revenue and their services' mind share with CSPs. These vendors (in alphabetical order) are:

Alcatel-Lucent. Ericsson. Huawei. Nokia Siemens Networks (NSN).

13.1.2. SWOT Analysis

NSN's Global Services division, which generated 47% of the company's total revenue in the first three quarters of 2011, contains the following business segments:

Network implementation.o Build solutions.o Mobile turnkey solutions.o Outside plant.o Project management services.o Customer logistics services.o Implementation services.o Construction works services.

16

o Site acquisition services. Energy solutions.

o End-to-end energy solutions with Managed Energy Services to expand coverage to new potential markets within remote areas; for reduced operating expenditure (opex) of telecom sites; for environmental protection and reduction of carbon footprint.

Managed services.o Network management and service operations.o Outsourcing of the whole, or part, of the operators' network activities.o Managed service operations and assurance — This division enables operators to

generate customized performance reports, analyze service performance and user experience, and engage in proactive performance optimization of nonvoice services.

o Build operations (transfer) — Offers design and build services (including networko implementation and operations setup), operations services, the transfer of operations

(or ongoing operations), related project management and consultancy services.o Network planning and optimization services, as part of turnkey projects or network

expansions/upgrades.o Network and service optimization — This includes network and service performance

analysis (benchmarking as well as performance assessment), the optimization of fixed and mobile networks and end-user service capacity extension, network evolution and support for introducing new features and services.

o Customized performance solution support for sales and marketing (service quality and usage monitoring, reporting and analysis and SLA monitoring), customer care (troubleshooting support, proactive device management and help desk monitoring), operations (resource performance and utilization monitoring, reporting and analysis) and IT management (integration of IT systems with network performance data).

Consulting and system integration (C&SI).o Network, business and strategy consulting.o System Integration (SI).

Project management. Technical architecture services, combining existing platforms and new solutions. Solution engineering services — Project execution. Solution consulting services that transform customers' business requirements into

solutions. Technical support, which manages the service life cycle after project delivery.

Care.o Software services.o Hardware services.o Multivendor care practice as an additional setup for hardware and software services.o Competence development services.

Figure 1 provides a graphical representation of the strengths, weaknesses, opportunities and threats pertaining to NSN's services business, based on Gartner's SWOT rating model. Figure 2 describes those strengths, weaknesses, opportunities and threats.

17

To create the figure, they analyzed the strengths and weaknesses that are internal to NSN and the opportunities and threats that are external to it. For each category they defined a number of characteristics based on parameters such as company or market, network outsourcing services, finance and operations. Each characteristic is examined in terms of its potential impact on NSN's position in the market if it is acted on, or ignored, in the next 12 months. These impacts are then rated as high, medium or low to determine a final numbered rating for each quadrant in the graphic.

There are characteristics common to NSN and in its main competitors — Alcatel-Lucent, Huawei and Ericsson. Over the past two years, all these companies have implemented a separate business organization (with profit and loss responsibility) for their service offerings. This allows these companies to distance themselves from their own product portfolios and establish an independent, unbiased technology and business advisory service. All companies are still in the early phases of convincing the marketplace of the independence of their outsourcing services from the technology and product installed base. Alcatel-Lucent, Ericsson and NSN are threatened by the cost-performance metrics that Huawei is bringing into the market. Through the commitment of regional application development centers, training facilities and financing options, Huawei is able to build its services business in emerging markets with localized facilities and staff that will be pushing the margins for single-task outsourcing requirements such as network maintenance or spare parts. This could threaten the margins of the existing three players, because their go-to-market strategies for outsourcing contracts are based on fulfilling key performance metrics. All four vendors have know-how and product offerings in software, as well as elements of the service delivery framework, either embedded or via partnerships. This allows them to eventually offer outsourcing services that directly touch the service interface to the subscriber. Differentiation on capabilities and the ability to innovate around the level of customer experience will be a key opportunity for service vendors in the coming years.

Figure 2 describes the strengths, weaknesses, opportunities and threats for NSN's Services business worldwide.

18

Strengths

Services Focus

Since the appointment of Rajeev Suri (ex-head of Services) as CEO, NSN has been particularly focused on services and growing the service business. NSN now gains 47% of all of its revenue from services.

Broad Services Offering

NSN's service portfolio encompasses consulting, network planning, network implementation, energy solutions, network and service management, operations, optimization and assurance, build operations and transfer, and maintenance and spare parts. Furthermore, C&SI are aligned with the company's software and IT services business, so that NSN can position itself for the strategic significance of developing and managing a profitable subscriber experience.

Services Scale

NSN now has 45,000 employees working in Global Services, spread over five regions in 120 countries. This number has increased significantly (over 40%) since late 2010 when NSN global services employed 28,000 people. This growth in personnel has mainly come from managed services growth, where the company has been taking on personnel from CSPs.

NSN is able to put its people at the customer site and to provide high-volume remote services. As of 3Q11, NSN has 3,000 professionals across its Global Network Operations Centers (GNOCs) who, it claims, manage over half a million network elements, handle 270 million alarms and resolve 280,000 trouble tickets per month.Over 300 network optimization projects are running at any given time. In

19

Brazil, NSN is working with 9,100 field engineers to support 130,000 multivendor network elements for Oi Brazil, of which 90,000 are in the operations and management area. With automation and standardization, NSN is able to scale its supply chain management and operations according to the needs of the operator.

Multivendor Capabilities

NSN has extensive multivendor capabilities for managed services, as well as spare parts and maintenance services. Its C&SI arm provides OSS and BSS support for many different vendors. With its care and spare parts management and its network optimization, particularly for Tier 2 CSPs, multivendor capabilities are a big differentiator for NSN. As of 2Q11, NSN was managing over a million network elements — of which 60% are from vendors other than NSN.

Weaknesses

Financial Performance and Ownership Concerns Impact CSP Positioning

The poor overall financial performance of NSN affects customer trust. Nokia and Siemens have buried the potential sale of the company until 2013, but the clock is ticking for NSN to fix its financial health and show margins beyond 1% (see "Vendor Focus for Nokia Siemens Networks," forthcoming).

Vertical Markets

Through 2009 and 2010, NSN has been unable to pursue opportunities in consulting and network design, rollout and management for adjacent markets — such as smart grid or transportation. In the past two months, NSN has been in discussions in China about a joint venture contract with a city: to build a joint development facility for new machine-to-machine opportunities, including management.Overall, their ability to offer managed services, consulting or multivendor capabilities for vertical markets is very slim.

Partnerships

NSN has generally taken a rather ad hoc approach to developing partnerships or ecosystems with IT service vendors to enhance its limited IT capabilities. The efficiencies of alignment in partnerships, as well as the determination of process and workflow interfaces, make it necessary for NSN to build these models. NSN wants to maintain its independence and will, therefore, need to rely on open interfaces with all IT services partners: which requires the company to be nonproprietary, but also requires additional time to build out the interfaces to the required IT partners of its customers. For improved scale, the company should partner with IT services vendors, such as business consultants, or IT system integrators — such as Wipro or Tata Consultancy Services (TCS) — as well as with regional or local IT and consulting vendors.

Combining Fast Growth With Profitability

NSN's services business has grown extremely fast during late 2010 and in 2011 (so far) in terms of its cost structure. NSN has taken in over 10,000 people from outside organizations (CSPs) corresponding to roughly one-third of its services workforce. It is difficult to manage this kind of growth profitably. Despite strong revenue growth, NSN's 2Q11 operating margin was only 1.1%.

North America

Alcatel-Lucent and Ericsson, being with the largest CSPs, are household names in the U.S. They lead in market share (see "Market Share: Carrier Network Infrastructure, Worldwide, 2010") and the closely correlated mind share and brand awareness. The CSP services market is less mature in North America than it is in Europe, but Ericsson in particular has been building a strong service presence in the U.S.: centered around its managed services megadeal with Sprint, where it took over management

20

of Sprint's networks and 6,000 people. NSN has been struggling to increase its presence here. Acquiring Motorola's wireless assets will not materially change this picture regarding the lead of the other companies; NSN will still be a distant third company in mobile infrastructure.

Opportunities

Vertical Services

In other words, targeting industries other than telecom with the existing service capability. This is a growth opportunity for NSN. It can use existing service centers, managed services scale and its world class network management products to build solutions for other industries such as the energy or the utility industry. The difficulty in penetrating these opportunities — beyond basic network rollout (cases where a "vertical" company wants to build a communications network) — for NSN and its industry colleagues is that the sales cycles are very long and the required business expertise and relationships take an equally long time to develop.

End-to-End Network and Subscriber Services

NSN has initial contracts, such as that with Zain or Vodafone, in which it is able to deliver an entire network management solution for voice — including partial service delivery and security options — as well as billing and charging.

Network Sharing

Network sharing by mobile and fixed operators is a growing opportunity for CSP service vendors.As CSPs consolidate operations, expand to other regions and have to continuously cut costs,sharing the network and its costs becomes increasingly attractive. On the fixed side in particular, network side next-generation broadband networks and broadband stimulus packages often come with a regulatory mandate for network sharing. NSN already has experience with network sharing projects and is continuing to develop network sharing solutions. It claims to have delivered theworld's first shared third generation (3G) network for 3GIS in Sweden, including its Managed Services.

Latin America, Africa and the Middle East

Geographically, most CSP service deals so far have been in Europe and Asia/Pacific. Latin America, Africa and the Middle East are still largely untapped territory for CSP services and, therefore, offer NSN growth opportunities. The company can utilize its global scale for remote delivery and has started building its local services presence, for example with Vodacom in Africa.

Threats

Competition From Traditional Telecom Service Companies

Ericsson is the strongest network service vendor for CSPs, based on market share, breadth of service capabilities and overall mobile network capabilities ,and continues to be a formidable adversary to NSN. NSN has managed to beat Alcatel-Lucent to the No. 2 vendor spot in overall services scale and revenue, because Alcatel-Lucent has not been able to invest in growth — given its strict financial austerity measures. Huawei continues to be a growing threat for NSN, as it expands its services presence and capabilities and the network footprint that drives product attached services and upsell opportunities .CSPs' Internal Service Functions

21

CSPs' internal capability to design, build and operate networks and the services on top is a threat for providers such as NSN. In many countries, unions make it very difficult to outsource or "rightsize" these workforces. An alternative approach for CSPs is to build their own service companies and offer their skills to other CSPs — or even to vertical industries. PCCW is offering services to other CSPs through Cascade, and several CSPs are looking at this option; we expect to see more CSPs offering these kind of services in future.

Independent Software Vendors and IT Service Companies

Independent software vendors and IT service companies are moving deeper into CSPs. Oracle, for example, is building direct relationships with CSPs and is on its way to architectures that are easier to implement without deep network knowledge or a lot of integration skill. Amdocs has branched into CSP application store enablement and acquired jNetX, a next-generation intelligent network communications company. Indian network outsourcers are also giving NSN significant challenges.

Over-The-Top Nontelco Infrastructures

NSN is betting heavily on traditional telco-oriented approaches, such as IP Multimedia Subsystems (IMS). While it is clear that IMS will be a part of CSPs' control architecture, there will also be more nimble solutions applied; for example, those for call control inside applications. NSN needs to build a better understanding of this world.

14. Implication for Company Being Profiled

NSN has improved its services scale and vision considerably in 2011. The company still has to deal with financial issues and the ownership question in the long term, and it needs to make progress on the end-user services and experience management as opposed to just network management services. Additional IT skills and references are also required.

15. Company Overview

As of January 2010, NSN finished its reorganization from five lines of business into three. Global Services contains network implementation, care and managed services, while C&SI is organized into business services. The objective of this reorganization was to mirror the buying centers and decision makers within CSPs: C&SI being the focus of CIOs and chief marketing officers, and Global Services the focus of chief operating officers. NSN is a joint venture between Nokia (51%) and Siemens (49%) and is a fixed engagement until 2013.

16. Reference :

22

Official web sites:

- http://www.nokiasiemensnetworks.com/- http://www.google.com/- http://en.wikipedia.org/wiki/Nokia_Siemens_Networks- http://www.nokia.com/- http://www.siemens.com/- NSN Sustainability Report 2011 (pdf)- Nokia Siemens Networks Fact Sheet (pdf)- http://www.ericsson.com/- http://www.alcatel.com/

23