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Nokia and Siemens to tango

By LI WEITAO (China Daily)
Updated: 2006-08-07 14:14

The tie-up will put Nokia and Siemens on par with Ericsson in the telecom market. That will help increase their chances of survival in China's GSM field.

Nokia 3G cellphone booth at a sci-tech exposition in Beijing, May 22, 2006 file photo. [newsphoto]

China Mobile, the larger of the country's two cellular operators, completed a round of sourcing of GSM network equipment in May. During negotiations, China Mobile asked foreign GSM vendors to drop the average price of their GSM gear by 10 per cent if the combined share of domestic vendors in any provincial GSM network of China Mobile is less than 20 per cent, Norson says.

The move could put smaller foreign vendors under high pricing pressure. It is designed to support domestic companies such as Huawei Technologies and ZTE Corp, Norson says.

China's smaller cellular operator, China Unicom, has proposed that the number of its GSM equipment suppliers in each province should be reduced to three. That means only the largest could stay on their vendor list.

The merger between Nokia and Siemens' network businesses, if completed, could help the two firms benefit from the new policies of China Mobile and China Unicom.