The merger of the network divisions of Nokia and Siemens follows the tie-ups between major vendors Alcatel and Lucent as well as Ericsson and Marconi.



Nokia Siemens CEO-designate, Simon Beresford-Wylie, announced at the 3GSM World Congress here in Barcelona that the future company was "day one ready" and noted that its combined product portfolio was being shown to customers for the first time last week.

He claimed the new entity was aiming to save 1.5 billion euros by 2010 though operational synergies, 40 percent of which would be realised from combined R&D. Other areas where costs can be shaved include procurement, a rationalisation of sales and marketing functions, consolidated IT systems and real estate.

He spoke of a strategy that would focus on opportunities in mobility and broadband, but which wouldn't be shackled by any particular technology "religion".

"We need to lose the religion," he said, noting that the future company would have a portfolio that encompassed a wide range of wireless technologies including GSM, CDMA and WiMAX.

Open standards would be crucial to its future product rollouts, he said, and he suggested that attempts to create a proprietary and closed mobile Internet in the past were misguided.

"There is only one Internet and I think we misunderstood that as an industry. Services and content [in the future] will come predominantly from the Internet and we have to understand that," Beresford-Wylie explained. "We're moving from a world where there was a telecom rhythm to one that has an Internet rhythm," he added.

The future CEO also outlined trends through till 2015, with the merged entity expecting the number of "connected" users to double to 5 billion. He expected more of these to be broadband-enabled, noting that today we're "still living in a world that is narrowband."

He also expected users in emerging markets to make the transition to broadband quicker thanks to new technologies such as WiMAX. "Broadband in the developing world won't take decades but will happen in the next few years," he suggested.

Commenting on the future company's new logo, Beresford-Wylie said that it was a reflection of "dynamism, movement and renewal." Like the telco world's other recent merger, Alcatel-Lucent, the logo of Nokia Siemens uses a wave shape and purple colour, in this case combined with yellow (Alcatel-Lucent is all purple).

However, the similarities end there, according to Beresford-Wylie, who suggested that the two companies? similar cultures and close proximity in Europe would make it a better fit than one corporation from Europe and another from the US.

In a separate interview with Database, Stephan Scholz, the designated head of Research, Technology and Platforms for Nokia Siemens Networks, said the new company would devote equal R&D resources to WiMAX as it does to traditional cellular technologies.

Scholz nominated access technologies as one of five broad areas that the new company would focus on when it commences operations. The other four areas for R&D focus were more efficient core networks, next-generation subscriber ID management, IMS for applications and OSS/BSS software for both mobile and fixed networks.

While more of a longer-term initiative, the creation of modular software for OSS/BSS functions was crucial and something that was needed on an industry-wide scale, according to Scholz, who nominated it as one of the first projects he would likely start as head of research.

He also spoke of his surprise at the extent of the current Nokia OSS/BSS platform for mobile networks, saying it was "much more than I was aware of." Scholz, who has been working in carrier development at Siemens, suggested that the platform could be adapted so that it can also be used for fixed and converged networks in future.

Other research focusses he proposed were for carrier Ethernet aggregation and a single database for subscriber information that would be common regardless of the application or service used.

The 50:50 joint venture is expected to have six business units when it commences operations: Radio Access, Service Core and Applications, Operation Support Systems, Broadband Access, IP/Transport and Services.