Nokia and Siemens show united front

Nokia and Siemens put on a great show of unity in Barcelona at the first press conference of their soon-to-be-born networks joint venture. The partners in the €20bn equal JV were housed in a single stand in the exhibition hall, under their new logo, where the Nokia blue and Siemens yellow blend harmoniously into one.

There was little mention of the bribery scandal [subscription link] at Siemens which has already pushed the launch of the joint venture from January to March.

“The fact that we are here in Barcelona under one stand shows our confidence in this deal gong through,” said Simon Beresford-Wylie, chief executive-designate of the unit, when asked about the ongoing investigation.

Mr Beresford-Wylie is not expecting any more slippage on timing, insisting that the deal will close in the first quarter.

He is also bullish on the market opportunities for the venture. With broadband internet access spreading and people connecting to the internet via mobile phone, Mr Beresford-Wylie expects some 5bn people to be internet connected by 2015. At the same time, traffic over the net will have increased 100-fold. This all means there are new networks to be built.

Mr Beresford-Wylie admitted the combined Nokia Siemens Networks was struggling in the US, where it is the number six in the market. He is hoping that new deals with T-Mobile USA and Cingular will help lift their status over the next three years.

The company also said there was a need to “brutally” cut the costs of networking in order to cope with the new internet world. The joint venture is busy shaving its own costs. It has committed to achieving $1.5bn in cost savings from the combination of the two operations.

Around 40 per cent of this will come from cutting back on research and development spending, with further savings from combining global sales teams and combining procurement and IT functions. No numbers for potential redundancies were mentioned, however.

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