A service unit in Germany is in danger of closing down after it lost its biggest client. This is according to a report by the German daily newspaper Sueddeutsche Zeitung. The newspaper cited sources from within the company as saying employees at NSN Services would be told that Deutsche Telekom has cancelled its contract with the company.
The newspaper reported that talks for a new contract failed. Without income from Deutsche Telekom, NSN Services will have to shut down by the end of 2013. This could result to the loss of 1,000 jobs. NSN and Deutsche Telekom declined to comment about the issue.
NSN is a joint venture between Nokia Oyj and Siemens AG. It is carrying out a cost-cutting plan that includes laying-off a quarter of its workers and selling some of its product lines. It will focus on mobile broadband.
Last Monday, NSN said it will sell its optical fiber unit to Marlin Equity Partners. This would result to the transfer of up to 1,900 workers in Portugal and Germany. Marlin Equity Partners is already an investor in NSN.
The deal will result in the unit to spin off as an independent company with the goal of becoming a leading provider in the optical market. NSN described the deal as a step in its transformation to becoming a mobile broadband specialist and will give both businesses the opportunity to concentrate investment and strategic focus on the company’s core segments.
Marlin Equity Partners is a Los Angeles based private investment firm with over $1 billion of capital. It formed a new company and will act as a consolidator to build an industry leader in the fragmented optical networking sector.
The new company will be based in Munich, Germany with its operations across the globe. It will be led by its present management team with Herbert Merz as the chief executive officer.