Nokia has made agreement with Siemens, to encourage the Finnish firm’s network equipment business.



According to this deal, Siemens will relive of the joint venture of sizeable, calming technology that processes a third of all fixed calls placed worldwide and a leading position in the soft switches that are the backbone of VoIP technology. Siemens has to get the margin target of 8-11 per cent.



According to company executive, Nokia has to make tough competition with Ericsson. The pressure of price will set to increase as telecom operators to merge the US to central Africa to Asia. Nokia Siemens Networks have to compete and encourage the technology for operators. They are going to spread the technology in Middle East and Africa also.



Nokia, which will merge the Helsinki-based venture in its results and have managerial control, will see its network revenue jump significantly; the joint venture would have had pro-forma revenue of E15.8bn. This gives Nokia a bigger base over which to spread fixed costs.



Nokia and Siemens expect that the joint venture will prove earnings-enhancing by the end of 2007, with cost synergies of E1.5bn a year expected by 2010.



Via: THE BUSINESS ONLINE