Nokia Siemens Networks, the global joint venture between Siemens Networks and Nokia Business Networks, officially launched in SA today, despite a troubled start in Europe, marred by delays and a corruption investigation.
The local arrival, clouded by uncertainty, follows closely the belated 1 April launch of the European operation. Start-up was initially scheduled for January, but was pushed back due to the discovery of 400 million euro slush fund.
These problems prompted a revision of the new company's global performance targets.
Speaking at this morning's media launch in Sandton, sub-regional head Jan Mrosik conceded it is not yet known what impact the revision will have on the local operations.
Globally, the joint venture will see a loss of 10% to 15% of its 60 000 staff, but it is uncertain how this will affect the Middle East/Africa operations. The company employs 730 people locally.
Mrosik said, locally, there has been no management shake-up. An analysis of the synergies between the two merged companies is under way, he added. Following the analysis, the company will discuss issues with local stakeholders before any changes are announced.
Empowerment transfer
He noted that Nokia Siemens Networks is keen to position itself aggressively in the local market, aiming to become the number one telecommunications network provider. In addition, Siemens Networks has a 26% black economic empowerment shareholding, which will be transferred to the joint venture.
Mrosik said this morning that providing broadband connections in the Middle East and Africa provides a big opportunity for Nokia Siemens Networks, as only half the global population - 2.5 billion - is connected to broadband so far.
By 2015, five billion people are expected to be connected to the Internet, with most of the connections being broadband, he said. He added the majority of the new connections will be from Africa and the Middle East.
Voice and data traffic will increase a hundredfold, with 70% to 90% of voice traffic being mobile, depending on the region, Mrosik added. Broadband growth will be fuelled by Internet usage until 2010. Sharing of content, including videos and clips, is also expected to play a large role in driving adoption, he said.
According to its revised targets, Siemens is expected to invest an additional 800 million euros ($1.06 billion) in the global joint venture, bringing its contribution to 2.4 billion euros in net assets, while Nokia will add 100 million euros, bringing its portion to 1.7 billion euros.
The venture is forecast to show approximately 17 billion euros ($22.43 billion) in annual revenue in the first year.
Share