Friday, November 6, 2009

NSN partnership

UT announced on yesterday's Q3 2009 earnings call a partnership with Nokia-Siemens.

"We are bidding this product actively in a number of current RFPs. Most notably, we are pursuing the China Mobile tender, which is already gone out to RFP stage, and we are doing this through a joint partnership with a new partner we have in China, Nokia-Siemens."

There will be some institutional calls today with management and I've fed some of my questions to them and one of them is the NSN relationship. Why do they need them for the China mobile TN bid when they won the other contracts without anyone else? Is this a case where the RFP stipulates some added requirements that UT cannot fulfill and highlights UTs weakness or lack of experience.

How is the partnership with NSN structured? Does it mean NSN/UT will team up in NSN's backyard in the future, thereby giving UT another outlet to sell their products. NSN is a huge entity with 64000 people and they are planning to cut 6-7k to save $700m/year. They are looking to partners/acquisitions to drive their strategy going forward.

So, UT is partially adressing the "scale" issues by partnering/signing sales agreements (DESCA/Logicalis). Ultimately, if this NSN partnership works out well, NSN could just acquire UT seeing UT's cheaper labor workforce in China and the technology/client base they have is more cost efficient.

I was out during yesterday's call and will post a summary of the Q3 2009 call this weekend. That will include some information/clarifications from institutional calls today.

BTW, there was NO one asking questions yesterday. UT has become irrelevant and something the management/BOD is responsible for.

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