Nokia 2011 Annual Report Download - page 47

• Nokia Siemens Networks may not successfully access the existing markets of the acquired
Motorola Solutions assets due to a lack of requisite capabilities, regulatory reasons or
otherwise.
• Nokia Siemens Networks may not realize the expected expansion of its customer base or
successfully cross-sell its products and services to customers of the acquired Motorola
Solutions assets.
• Nokia Siemens Networks may lose key employees of the acquired Motorola Solutions assets.
• There may be delays in the full implementation of Nokia Siemens Networks policies, controls,
procedures, information technology systems and other business processes with respect to the
acquired Motorola Solutions assets.
• Unexpected contingent or undisclosed liabilities may have been acquired with the acquired
Motorola Solutions assets and agreed indemnities may provide insufficient coverage against
such liabilities.
• Impairments of goodwill as a result of the acquisition could arise.
The networks infrastructure and related services business relies on a limited number of
customers and large multi-year contracts. Unfavorable developments under such a contract or
in relation to a major customer may have a material adverse effect on our business, results of
operations and financial condition.
Large multi-year contracts, which are typical in the networks infrastructure and related services
business, include a risk that the timing of sales and results of operations associated with those
contracts will differ from what was expected when the contracts were entered into. Moreover, such
contracts often require the dedication of substantial amounts of working capital and other resources,
which may negatively affect Nokia Siemens Networks’ cash flow, particularly in the early stages of a
contract, or may require Nokia Siemens Networks to sell products and services in the future that would
otherwise be discontinued, thereby diverting resources from developing more profitable or strategically
important products and services. Any non-performance by Nokia Siemens Networks under those
contracts may have a material adverse effect on us because network operators have demanded and
may continue to demand stringent contract undertakings, such as penalties for contract violations.
The networks infrastructure and related services business is also dependent on a limited number of
customers and consolidation among those customers is continuing. In addition, network operators are
increasingly entering into network sharing arrangements, which further reduce the number of networks
available for Nokia Siemens Networks to service. As a result of this trend and the intense competition
in the industry, Nokia Siemens Networks may be required to provide contract terms increasingly
favorable to the customer to remain competitive. Any unfavorable developments in relation to or any
change in the contract terms applicable to a major customer may have a material adverse effect on our
business, results of operations and financial condition.
Providing customer financing or extending payment terms to customers can be a competitive
requirement in the networks infrastructure and related services business and may have a
material adverse effect on our business, results of operations and financial condition.
Communication service providers in some markets may require their suppliers, including Nokia
Siemens Networks, to arrange, facilitate or provide financing in order to obtain sales or business. They
may also require extended payment terms. In some cases, the amounts and duration of these
financings and trade credits, and the associated impact on Nokia Siemens Networks’ working capital,
may be significant. In response to the tightened credit markets, requests for customer financing and
extended payment terms have continued on the same level in terms of volume and scope since 2009.
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