Wednesday, July 19, 2006

Merging the Obvious

Nokia Corp. and Siemens AG announced that, they will combine their mobile-network operations to create a joint venture with annual revenue of about $20 billion, a move that will help them compete with market leader Ericsson AB.

The 50-50 joint venture, to be called Nokia Siemens Networks, will be comprised of Nokia’s network business group and Siemens’ carrier-related operations, creating estimated synergies of 1.5 billion euros ($1.9 billion) by 2010, Nokia says..

The deal is the latest in a wave of consolidation that began last October when Stockholm-based Ericsson agreed to buy Marconi Corp.’s broadband Internet and telecommunications assets for 1.2 billion pounds. In April, Paris-based Alcatel launched a $13.4 billion stock swap to acquire Lucent Technologies Inc.

Wow , now lets see what does this mean for us? cheaper mobiles? or a war with ericsson? Anyways for customers and companies its a win win situation. But one should not forget the workers that will get fired as a direct result of this merger. Both the companies agreed that between 10 percent and 15 percent of staff positions, or about 9,000 jobs, would likely be cut over the next four years.

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