Nokia Siemens Network(NSN), a 50-50 JV between Finnish mobile giant Nokia and Germany’s engineering technology conglomerate Siemens will be clinching the approximate $1.2 billion buyout of Motorola?s telecom equipment arm in the first quarter of 2011, said Armando Almeida, head of LAT Region, NSN. He said the billion dollar global deal-making is dragging on due to the objection made by bureau of ministry of Commerce of China citing Monopoly issues. ?One can’t purely call it as a monopoly issue as termed by the Chinese authorities, we are working at it and possibly the deal could be accomplished by the first quarter of 2011.?
The deal when done would lift NSN market position(in terms of revenue) from the sixth to third in the US telecom gear market. For India, NSN would be merging the R&D operations of Motorola with Nokia Siemens in the post acquisition phase, he said. When asked about how NSN is taking on tough competition from Chinese companies in the telecom gear market, Almeida said the company was able to counter the predatory pricing by adopting competitive pricing rates, made possible due to shifting of high cost R&Ds centres from Europe to low cost R&D centres like India.
“For all these years, Asian players were outpacing us in terms of R&D costs. We decided then to relocate our European R&Ds to low cost destinations in Asia including India. Globally, we had embarked on expenditure-cuts to the tune of 2 billion euros.European R&D relocation was part of the pruning exercise. The relocation expenses in India were meeted out from the 100 million euros investment plan that was committed in 2008. We are now equally competitive with the Chinese players in the market”, he said.