Nokia Siemens services unit faces closure: paper

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December 4, 2012 11:14 AM EST

A service unit of Nokia Siemens Networks (NSN) in Germany faces closure after losing a contract with its biggest customer, German daily newspaper Sueddeutsche Zeitung reported.

The newspaper cited company sources as saying workers at NSN Services would be told in a meeting on Wednesday that Deutsche Telekom has cancelled its contract with the Nuremberg-based company effective at the end of the month.

The newspaper said talks for a new contract have failed. Without the income from Deutsche Telekom, NSN Services will have to shut down at the end of 2013, affecting 1,000 jobs, it said.

NSN declined to comment. Telephone calls to Deutsche Telekom late on Monday were not answered.

NSN, a 50-50 joint venture between Nokia Oyj and Siemens AG, is carrying out a cost-cutting plan, which includes laying off a quarter of its staff and selling product lines to focus on mobile broadband.

On Monday, it said it was selling its optical fiber unit to Marlin Equity Partners, resulting in the transfer of up to 1,900 employees, mainly in Germany and Portugal.

(Reporting by Maria Sheahan and Tarmo Virki; Editing by Bob Burgdorfer)

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Copyright 2012 Thomson Reuters. All rights reserved.

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