A slow start for Nokia & Siemens Networks JV

Stuart Corner
Tuesday, 03 April 2007 06:00

IT Industry - Deals

Nokia Siemens Networks, the 50/50 joint venture combining the two companies telecoms infrastructure arms, announced last June  - started operations on April 1, with a lowered growth forecast.

"In terms of market outlook, over the last couple of months, there has been a narrowing of visibility and indications of a slowdown in spending in some regions. As a result, Nokia and Nokia Siemens Networks today are updating the outlook for the mobile and fixed services infrastructure market for 2007," the two companies said in a joint statement.

Nokia and Siemens say they "now expect very slight market growth for the mobile and fixed infrastructure and related services market in euro terms in 2007. Previously, Nokia expected slight growth in the mobile and fixed infrastructure and related services market in euro terms in 2007."

According to reports, by "slight" and "very slight" they mean around five percent and two to three percent respectively.

The newly merged company claims to be the third largest with 2006 revenues of euro 17.1 billion, but will not report its financials separately: they will be consolidated with Nokia's reporting.

Nokia Siemens Networks has approximately 600 customers and operates in about 150 countries. It claims to have submitted approximately 140 joint bids since anti-trust approvals in November, in addition to the separate Siemens and Nokia activities.
 
The JV has five product business units - Radio Access, Broadband Access, Service Core and Applications, IP/Transport, and Operations Support Systems and a Services Business Unit, which employs some 20,000 professionals worldwide.

"We want to be the number one communications enabler for our customers; the number one company connecting the world through seamless connectivity of mobile and fixed communications; and the number one workplace of choice for our employees. We also want to be known for operating with the highest standards of ethics and integrity," said Simon Beresford-Wylie, CEO of Nokia Siemens Networks.  This comment relates to a still unfoldin corruption scandal surrounding senior Siemens executives.
 
"As the market changes and our customers face complex business challenges, we will also need to change at Nokia Siemens Networks," Beresford-Wylie added. "Bringing the Internet and connectivity to the vast majority of people by 2015 will require finding new ways to lower the cost of connections, particularly in the large emerging markets. As Nokia and Siemens said when announcing the new company on June 19, 2006, we will seek estimated cost synergies of EUR 1.5 billion annually by 2010 in order to build a strong, competitive Nokia Siemens Networks."