* Parents Sept cash injection was last -letter to employees
* Nokia and Siemens both invested 500 mln eur in Sept
* Parents see venture becoming more independent, IPO
By Tarmo Virki and Victoria Bryan
HELSINKI/FRANKFURT, Nov 27 Struggling
Nokia Siemens Networks (NSN), the world's
second-largest maker of mobile phone network equipment, cannot
expect any more cash injections from its two parent companies,
chief executive of the venture said in a letter to employees.
Parents Nokia and Siemens have
provided capital "for the last time" and expect this investment
will provide results, according to a copy of a letter sent from
CEO Rajeev Suri to NSN's 74,000 employees, which was obtained
"Our profitability remains far too low, with huge net
losses since the start of the company. We continue to burn cash
and have consistently generated negative free cash flow," Suri
said in the letter seen by Reuters.
"We have too many businesses that have never produced
adequate returns and regions that continually deliver losses."
A spokesman from NSN declined to comment.
NSN has struggled to make a profit since being set up in
2007 and earlier this week, Nov. 23, announced plans to axe
17,000 jobs, nearly a quarter of its workforce.
NSN was formed by Finnish cellphone maker Nokia and German
congolmerate Siemens in the hope of building enough scale to
lead an industry dominated by Swedish company Ericsson and, increasingly, by Chinese entrants.
It has faced aggressive pricing from rivals and an economic
downturn that has forced telecoms companies to cut spending.
After the announcement several analysts said they thought
the venture would need to raise more money from its parents to
cover the restructuring costs on top of the 1 billion euros its
raised only in late September.
NSN said earlier this week it would revamp its offering,
focusing on mobile broadband and services, while exiting some
of the undefined businesses.
In the letter to employees Suri said the company would seek
to exit or to put on maintenance mode businesses such as
fixed-line VoIP, broadband access, WiMAX, narrowband, carrier
Ethernet, business support systems, and communications and
Suri said Japan, Korea and the United States will be the
three priority countries for NSN where it "absolutely must
German magazine Spiegel reported on the letter earlier on