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With a vision of five billion people connected and "always
on" by 2015, the proposed Nokia Siemens Networks joint venture has
decided to focus on the Internet-based telecommunications industry.
"Nokia Siemens Networks will be ideally positioned to help our
customers capture the opportunities that will arise as connected
communities swell to around five billion by 2015, when people will live
in a broadband-Internet Protocol (IP) world connected to the Internet,"
Nokia Siemens Networks designated chief executive officer (CEO) Simon
Beresford-Wylie told journalists in Barcelona, Spain, during the
launching of the joint-venture brand Monday on the sidelines of the
3GSM World Congress.
The four-day event, which officially opened Monday, has drawn more than
50,000 industry players from major cell phone makers like Nokia Corp.,
Motorola Inc., Samsung and LG.
In addition to Nokia-Siemens, other major technology suppliers, such as
Sweden's LM Ericsson, France's Alcatel/Lucent, Canada's Nortel Networks
Corp., and U.S. firm Qualcomm Inc., are also participating in the event
so as to talk directly to their corporate customers about what the
future holds and what can be implemented quickly.
Nokia-Siemens forecast that by 2015 there will be 100 times more
broadband traffic than either fixed line or wireless.
Beresford-Wylie said that taking advantage of Nokia's strengths in the
mobile market and Siemens's strengths in the fixed-line market, the
joint venture was poised to be the largest telcom giant in the world
with combined sales of about 15.6 billion euro (US$19.5 billion).
Between them, Nokia and Siemens currently have a total of 600 corporate
customers in 150 countries, and serve about one billion customers
worldwide.
Nokia and Siemens agreed in June last year to combine their network
businesses into a single entity. The merger is expected to be concluded
in the first quarter of 2007.
Under its new management, Nokia Siemens Networks will have six business
units, including radio access, service core and applications, broadband
access, and IP networking and transport.
The merger itself, Wylie said, had benefited the 50-50 joint venture
through greater overall cost efficiency, wider global reach in services
and sales, greater research and development capacity, and a wider range
of global partners and platforms.
Nokia and Siemens Networks designated chief operating officer Mika
Vehvilainen said that the new venture would spend 40 percent of total
cost savings -- 1.5 billion euro -- on research and development.
"We are aiming to offer new applications as fast as we can, to be the
only company that can offer a full range of services throughout
fixed-line and mobile networks," Vehvilainen said.
The merger of Nokia and Siemens is in the line with the global trend
toward a major restructuring of the telecommunications industry through
mergers and acquisitions.
Previously, French-Alcatel and U.S.-based Lucent Technologies merged to
create a company with combined revenues of about 17.2 billion euro in
2005, thereby leapfrogging ahead of LM Ericsson AB with 16.2 billion
euro in 2005 revenues, to take control of about 18 percent of the
highly competitive telecoms-equipment market.
The merger between Alcatel and Lucent followed the surprise move by LM
Ericsson in January this year to take over the telecommunications
assets of British telecoms giant Marconi Corporation for about $2.1
billion.
This week, British phone operator Vodafone took a 67 percent stake in
India's forth largest telco, Hutchison-Essar, for $11.1 billion to tap
into the Asian country's fast-growing market.
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