For Nokia Siemens Joint Venture, an IPO Down the Line?

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Nokia Siemens Networks' chief financial officer says the telecom equipment maker may launch an IPO in its distant future, a move that could help its current efforts to sell a chunk of its stock to private equity buyers. According to a Reuters report, Nokia Siemens CFO Joe Kaeser said at an investment conference today: "If everything continues to develop well, an IPO of NSN is possible in the medium term."

To date, however, the networking giant has struggled to turn a profit since Nokia (NOK) and Siemens (SI) paired up three years ago to form the joint-venture with equal ownership. The parties were hoping to achieve fatter double-digit profit margins under the six-year deal, but that's remained elusive, according to the report.

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Since August the company has tried to strike a deal to get private equity firms to acquire a minority stake. But according to Reuters, Nokia Siemens has failed to entice any to sign on.

Although Nokia Siemens has not yet become a profit machine, that hasn't held it back from engaging in billion-dollar buyout deals. Over the summer, Nokia Siemens said it would buy a significant portion of Motorola's wireless networking equipment for $1.2 billion.

Networking equipment doesn't come cheap and that, in part, has put a damper on Nokia Siemens efforts to be profitable. The telecom and networking industries are capital-intensive, requiring industry players to spend big bucks. So, seeking private equity investors is a logical, though obviously difficult, strategy.


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