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Nokia Siemens Network is no April fool

Industry giants Nokia and Siemens have announced that their much anticipated network tie-up will commence global operations on April 1, 2007.

Industry giants Nokia and Siemens have announced that their much anticipated network tie-up will commence global operations on April 1, 2007.

Officially named as Nokia Siemens Networks, the company predicts that it will be the second largest company in the mobile infrastructure and services segment of the industry. In addition the company forecasts it will be the third largest telecommunications infrastructure vendor in the global market behind Alcatel-Lucent and Ericsson-Marconi.

The company claims the consolidation will enable it to leverage the combined expertise of both Nokia and Siemens’ R&D teams to develop innovative product platforms, as well as improve efficiency in offering its products and services to market.

"In the consolidating telecommunications market Nokia Siemens Networks will offer customers cost-saving, leading-edge solutions that will also optimally meet their needs with regards to convergence," said Nokia CEO Olli-Pekka Kallasvuo.

The 50:50 venture will benefit from an initial investment of US$5.4 billion with Nokia and Siemens contributing US$2.2 billion and US$3.2 billion respectively.

"With the launch of Nokia Siemens Networks, a strong leader with excellent growth potential is entering the top league of the telecommunications market. In taking this step, we are dramatically strengthening our market position and creating sustainable value," said Klaus Kleinfeld, president and CEO of Siemens AG.

The vendor expects cost synergies of US$1.9 billion annually by 2010, deriving from consolidation, sourcing benefits, R&D development and the elimination of overlapping functions.

The vendor’s proposed portfolio plan encompasses six business units: Radio Access; Service Core and Applications; Operation Support Systems; Broadband Access; IP/Transport; and Services.

The board of Nokia Siemens Networks will consist of seven members: Nokia president and CEO, Olli-Pekka Kallasvuo, will chair the board and Siemens CEO, Klaus Kleinfeld, will act as the vice-chair.

The other members of the board are the head of Nokia operational human resources, Juha Äkräs; Siemens CFO, Joe Kaeser; member of the Siemens managing board, Eduardo Montes; head of Nokia Technology Platforms, Niklas Savander; and Nokia CFO, Rick Simonson.

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