Nokia, Siemens to merge network gear business

New 50-50 joint venture to tackle competition from Ericsson

The new company is to be called Nokia Siemens Networks The deal is the latest in a wave of consolidation

FRANKFURT: Nokia Corp. and Siemens AG said on Monday they will combine their telecommunications network equipment units in a joint venture with annual revenues of euro15.8 billion ($20 billion), a move to help them compete with market leader Ericsson AB and attract new customers. The 50-50 joint venture, to be called Nokia Siemens Networks, will comprise Nokia's network business group and Siemens' carrier-related operations, creating estimated synergies of euro1.5 billion ($1.9 billion) by 2010, Nokia said.

"The new company will and has to have an attitude of a challenger fiercely competitive with an unerring focus on the customer because at the end of the day, eventually, it is the customer who will decide,'' Nokia's new Chief Executive Olli-Pekka Kallasvuo said.

The deal is the latest in a wave of consolidation that began last October when Stockholm-based Ericsson agreed to buy Marconi Corp.'s broadband Internet and telecommunications assets for 1.2 billion pounds. In April, Paris-based Alcatel launched a $13.4 billion stock swap to acquire Lucent Technologies Inc.

Analysts said the deal made good sense in terms of industry consolidation.

Klaus Kleinfeld, CEO of Munich-based Siemens, said the deal would position the new company to tackle Ericsson, which is the top maker and seller of the network equipment used by wireless providers to send phone calls, downloads and data to and from cell phones and other devices. AP

UNI reports from New Delhi: Services from India

Nokia will begin its global managed services business in India from July, and extend its service contract with Hutchison Essar to cover 19 of the 23 operator's circles. ``Nokia managed services will be led globally from India effective July 2006,'' company's Country Head for Networks Ashish Choudhary said.

Nokia further announced that its first Global Networks Solutions Centre (GNSC) in Chennai had started operations.

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