What’s the deal with NSN?

Posted in Financials, LightSquared, Operators, Spectrum at 10:12 am by timfarrar

I commented last week that Nokia Siemens Networks seemed rather unenthusiastic about the prospects for LightSquared in its comments at the Mobile World Congress. Yesterday news emerged that LightSquared may be in negotiations with Sprint to use their cell sites and equipment to help build out its network. However, the article make no mention of any role for NSN in the event that this deal comes to fruition. [It is worth noting that it is in the interests of both Sprint (due to their ongoing price negotiations with Clearwire) and LightSquared (who are trying to ensure that T-Mobile and other potential partners take them seriously) to leak the news of talks at this stage, even if a deal is unlikely to be reached]

Now GigaOm is reporting that NSN may have suspended its tower permitting and siting work, and according to the article NSN did not deny this suggestion. This also seems to be confirmed by a former LightSquared vendor sourcing consultant, whose public LinkedIn profile indicates that from October 2010 to January 2011 he “Conducted Site Development Vendor Sourcing initiative for LightSquared. Drafted scopes of work, selected vendors, negotiated pricing and terms, and executed contracts for a nationwide cell site deployment plan. Developed and ran a Build to Suit RFP. Reviewed lease negotiation process and Master License Agreements with the major tower companies”. The termination of this role in January 2011 would certainly fit with the rumors that I have been hearing about the timing of NSN’s apparent suspension of work.

Interestingly enough this consultant has also now published a blog post indicating that he “applaud[ed] this creative approach [in the reported LightSquared/Sprint negotiations] which could remove 4-6 months off the deployment schedule for each cell site”. However, this article does not make clear what NSN’s role in such a deal would be, other than that “LightSquared will be using its own equipment purchased from Nokia Siemens Networks”. If NSN really is reduced to the position of simply supplying base station equipment for LightSquared and/or Sprint to deploy, then it hardly seems plausible that the contract would still be valued at $7B. As a result, it is now far from clear what (if anything) will ultimately materialize from a contract that was touted just last July as “the largest order ever placed in the mobile telecoms gear industry”.

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