February 12, 2007 3:18 PM PST

Nokia Siemens pledges to end the hype

BARCELONA, Spain--Nokia and Siemens have for the first time presented their 50-50 joint venture, Nokia Siemens Networks.

Speaking at the 3GSM World Congress here on Monday, the newly merged company's chief executive, Simon Beresford-Wylie, said the two companies' network businesses were complimentary, with little overlap in their customer bases.

The merger was announced last June, but then delayed by investigations into alleged bribery at Siemens.

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Beresford-Wylie also admitted that the mobile industry had "overspecced and overhyped" 3G, or third-generation, technology, and had missed the chance to connect it with the world of Ethernet and Internet protocol. "There is only one Internet, and I think we misunderstood that as a sector," he said.

The Internet would increasingly blur the boundaries between industries, Beresford-Wylie continued, adding that the number of people connected to fixed or mobile broadband is expected to double to 5 billion by 2015. He also predicted that the rise of high-definition television and IPTV would lead to a hundred-fold increase in data traffic by 2015, ballooning at a rate of between 60 percent and 70 percent every year and eventually requiring gigabyte-per-second connections for individual users.

The enablers for this, said Beresford-Wylie, would be HSDPA (high-speed downlink packet access)--the faster version of 3G--and WiMax. Nokia will be bringing its mobile WiMax solutions to the combined portfolio, while Siemens will bring its fixed WiMax products.

3G and mobile WiMax have been seen as rival technologies. Beresford-Wylie said the company had "lost a bit of religion here" and was happy to have both technologies in its portfolio, with "long-term evolution" of 3G for operators who have invested in the technology, and WiMax for those who have not.

The deal to create Nokia Siemens Networks will officially close in the first quarter of 2007. It will create the world's second-largest telecommunications network provider, after Ericsson but ahead of Alcatel Lucent. The company will have customers in 150 countries and a portfolio incorporating applications and content, consulting and integration, devices, operator support, hosting, managed services and a unified IP core.

According to Beresford-Wylie, combining Nokia and Siemens' networks operations will result in massive savings, with the greatest proportion coming from unified research and development.

David Meyer of ZDNet UK reported from Barcelona.

See more CNET content tagged:
Siemens AG, HSDPA, portfolio, Nokia Corp., 3G

 

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