Sales were also affected by "challenges related to the start of operations, including delayed purchases by customers to a greater extent than expected," and a greater focus on the integration of the Nokia and Siemens businesses by the management, stated Nokia.

    As a result, Nokia today announced that NSN's cost savings plan will be accelerated, with the planned €1.5 billion ($2 billion) in savings originally planned by the end of 2010 now being achieved by the end of 2008. (See Nokia Siemens to Cut 9,000.)

    In addition, a further €500 million ($683 million) in annual cost savings is being targeted.

    The vendor says it still expects "very slight market growth for the mobile and fixed infrastructure and related services market in euro terms in 2007," but the original target of double-digit operating margins for NSN's first 12 months of business no longer applies.

    "Nokia Siemens Networks had a challenging quarter. Both net sales and margins were weak and these adverse developments require decisive action," stated Nokia's CEO Olli-Pekka Kallasvuo in the company's earnings statement. "Accordingly, Nokia and Nokia Siemens Networks are accelerating and increasing the new company's annual cost synergies target. Nokia Siemens Networks must also ensure that the company is positioned for success and leadership in the fast changing infrastructure market."