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Technology Stocks : Nokia Corp. (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (1309)	9/14/2001 9:20:14 AM
From: Eric L	Read Replies (1) \| Respond to of 9255

re: Cellular News on NOK Ratings >> Moody's Affirms Nokia , Outlook Negative UK Cellular News 14th September 2001 Moody's Investors Service, the debt rating company has confirmed the A1 issuer rating for Nokia and the Prime-1 rating of the company for short-term debt. The negative outlook for the ratings is concerned with the slowdown in the mobile phone market and the reduction of carrier subsidies, which raises price competition in mobile phones, and the potential for an extended transition period for mobile networks. Moody's says that in the networks business, Nokia faces strong market potential, compared to its presence in GSM networks, in the new technology standards, which are almost all compatible with Nokia's development path. Hence, management is driving for a one third global market share in 3G equipment with competitive pricing for early orders and vendor financing in some cases. The vendor financing contracted to date and projected peak exposure including extended payment terms is reasonable if compared to the company's equity base. However, the signs that the mobile phone market has turned into primarily a replacement market with rising price competition are mounting. Moody's expects price competition to intensify and without operator subsidies it will become increasingly challenging to maintain Nokia's price differential even with a superior offering, including the new line of GPRS-phones to be released in the third and fourth quarter 2001, and the software support from "Nokia Club", the customer loyalty program. On the networks side, orders for upgrades in Nokia's installed base are under pressure, as the operators are cutting back on investments for financial reasons. At the other end of the transition period, the roll-out of 3G systems has been deferred by several operators. Moody's is concerned that the transition period may extend further and require additional financing for R&D, inventory and customer support which would create pressure on the rating. Also, Nokia has not yet commented how it will treat and recover its exposure to Telsim, the 2nd largest Turkish mobile operator, which defaulted on a payment of roughly US$240 million due Nokia in April of this year. << - Eric -