Nokia - the operators' outsourcer?

Nokia is known for its products - now it wants to be a services company too.

A recent reorganisation within the vendor's infrastructure arm - the one known for providing base stations and other types of equipment to mobile network operators - means services will be an increasingly significant revenue stream.

Around a third of Nokia's Networks division's 16,000 staff now focus on services, contributing about a quarter of Networks sales - but that revenue will grow in the near-future, said Nokia Networks senior VP Services Bosco Novak on Friday.

While the other two parts of the Finnish company are fairly straightforward, in short concentrating on devices and enterprise connectivity, there is now the prospect of Nokia Networks becoming an outsourcer, taking on work for operators around the world.

Novak said that it will be an industry trend but that not all equipment providers will go down this route and, of those that do, even fewer will seek the transferring of operational assets to the vendor. "There are complex issues [with that approach] and it is not a top priority," Novak said.

Such a move is not entirely unsurprising for Nokia. IT hardware providers such as IBM and HP long ago realised it is worth getting into the higher-margin business of helping customers operate technology - often technology these providers have themselves sold them.

Novak said Nokia Networks is now investing in systems integration and consulting expertise as well as OSS - which in telecoms stands for operational support systems. It fully expects to take on staff once employed by operators as it wins services business, Novak told silicon.com.

In the fourth quarter of last year Nokia last week reported its handset sales picked up. They accounted for a market-leading 34 per cent of global sales, a spokeswoman said, though the vendor's calendar year share only averaged 32 per cent after a disappointing start to the year.

Sales of network equipment have not been so strong, prompting industry watchers to predict some kind of tweaking of approach within the Networks arm.