20060619 nokiasiemens 71236327 18
Simon Beresford-Wylie, designated CEO of Nokia Siemens Networks, displays the two companies' mobile phones during a press conference on June 19, 2006 in Frankfurt, Germany. - 


MARK AUSTIN THOMAS: It's a hook-up of two of the world's biggest telecom equipment makers. Nokia of Finland and Siemens of Germany are merging some of their manufacturing operations. From the European Desk in London Stephen Beard has more.

STEPHEN BEARD: The two companies are merging their mobile and fixed-line phone network equipment businesses.

The new entity is expected to have sales worth $20 billion a year by the end of decade .The deal demonstrates where the whole telecom industry is heading. Increasingly, says Justin Urquart-Stewart of Seven Investment, telecom operators will want to offer their customers a total package.

JUSTIN URQUART-STEWART: Internet, broadband operations to ordinary telephony — mobile and fixed — and also television and video facilities, all coming together.

The new company will make equipment which allows all these services to converge.

But, says Urquart-Stewart, the latest deal shows how much pressure Western manufacturers are under from Asian competition. He's forecasting big job losses among the Nokia and Siemens workforce.

In London, this is Stephen Beard for Marketplace.