Telecoms giants form infrastructure joint venture to take on market leader Ericsson and Asian rivals
Two of Europe's largest telecommunications firms - Nokia and Siemens - will combine their network services and equipment units to form the world's third-largest telecommunications infrastructure company.
The two companies said the merger would help them compete against market leader Ericsson and the emergence of Asian telecommunications firms which had been gaining market share at the expense of the industry's more established players.
The move also reflects a trend towards convergence in the industry, where equipment manufacturers and service providers are expected to offer a full range of fixed-line and wireless products so that operators can offer a so-called quadruple play of fixed and mobile voice calls, internet access and pay-television services.
'Consolidation is the name of the game,' Siemens chief executive Klaus Kleinfeld said. 'It is driven by combining information technology with communications, the convergence of fixed and mobile communications with entertainment and the emergence of new competitors from Asia.'
The 50-50 joint venture, Nokia Siemens Networks, will create a company with Euro15.8 billion ($154.4 billion) in combined revenues, making it the world's third-largest telecommunications infrastructure company and the second-largest in the mobile infrastructure and network services market.
The Nokia-Siemens merger follows the GBP1.2 billion ($17.1 billion) purchase of Marconi by overall market leader Ericsson last year, and the US$13.4 billion purchase of Lucent Technologies by Paris-based broadband internet equipment manufacturer Alcatel in April.
