Nokia and Siemens merge networks

NOKIA AND Siemens have admitted they plan to merge their respective network divisions into a new 50:50 joint venture called Nokia Siemens Networks.

The new, combined business should prove to be the second-largest company in mobile infrastructure. To give it further rankings, it will be second in services, third in fixed infrastructure and the third-largest in the overall telecommunications infrastructure market.

Merging two ventures of this size frequently doesn't result in the new company retaining the combined market shares. Sony Ericsson and Siemens/BenQ, provide an example of this. It's also a fact that jobs will go as companies combine sales teams, and so on.

Observers are now speculating that after the Alcatel/Lucent deal, the next logical merger is Ericsson and Motorola.

However, a look at the list of capabilities which the new venture boasts shows it poses the biggest threat to Cisco. It includes mobile core, fixed broadband, IPTV, and WiMAX.

There's been plenty of speculation that Cisco might be forced to buy into the mobile infrastructure arena. So the INQ tips a Motorola Networks division merging with Cisco, not Ericsson.

Curiously there's no mention of NEC. In order to break into the 3G and HSDPA market, NEC has been working closely with Siemens. The pair even won a contract to supply 3's HSDPA capability.

This will prove even more interesting since Ericsson is managing 3's networks. Ericsson will now have to work with NEC, Siemens and now Nokia to get the HSDPA gear into place. That should be fun.

They've made a shrewd move, however. They've put a Brit - Simon Beresford-Wylie - in charge of the new venture. This suggests the HQ for the new venture will be in England, so that there's no fight over whether it should be in Finland or Germany. µ