Nokia and Siemens plan to merge their mobile networks

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In what might be a sign of things to come as well as current trends, Nokia and Siemens are planning on mergin their mobile networks. This is part of a joint venture, with each of the companies maintaing a 50/50 ownership in the newly formulated entity known as Nokia Siemens Networks. The potential of the deal is obvious. The companies stand a great change of limiting their expenses by combining their operations.

Nokia expects the deal to result in $1.9 billion in savings by 2010. The current combined revenues is $20 billion. Without a doubt, this deals signals the emergence of a serious player in the deadly serious global mobile market.

“The new company will and has to have an attitude of a challenger — fiercely competitive with an unerring focus on the customer — because at the end of the day, eventually, it is the customer who will decide,” Nokia’s new Chief Executive Olli-Pekka Kallasvuo said.

The stock of both companies, NOK and SI rose on the news.

Mergers are hot in this sector now, and several other partnerships are plausible. The massive new company is an immediate major player:

The new company will have some 60,000 employees. Its chief financial officer will be Peter Schoenhofer from Siemens. Its headquarters will be in the Finnish capital, Helsinki, but it also will have key offices in Munich.

They’re in a hot market and just did a potentially brilliant merger. This is a definite stock to add to your watchlist. If they can cut costs faster than predicted, the value of their shares should see an immediate impact.

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