MUNICH -- By optimizing its portfolio and embarking on a strategicreorientation, Siemens Information and CommunicationNetworks (IC Networks) is responding to the need of carriersand service providers for solutions and technologiesdesigned for an immediate improvement in profitability.

Siemens is concentrating on developing and providingtechnologies, solutions, and services for its market-leadingend-to-end portfolio for building the Next GenerationNetwork (NGN). “We enable carriers both to enjoy a quickerreturn on assets (ROA) and to establish business that offerslong-term profitability,” says Thomas Ganswindt, Presidentof the IC Networks Group.

An economic analysis, based on themethods and research of the Gartner Group confirms thatcarriers using the Siemens solutions can cut their operatingcosts by up to two thirds, increase revenues by some 20percent and markedly improve the net cash figure.

The study, which employed the methods and research of theGartner Group to calculate the benefits of the Siemens NGNsolutions (for NextGen Switching with Surpass and NextGenAccess) for various carrier business models, showed thatusers could expect faster amortization, improved cash flowand increased sales:

1) The investment involved in the migration from traditionalswitching technology to NextGen Trunking with Surpass can beamortized within two years.

2) On the broadband access front, the use of innovativeNextGen access solutions (such as VDSL and SHDSL withmultimedia applications), achieving better services forcustomers, can double cash flows over the next 10 years,representing an additional 50 percent in relation to today’sfigures (Net Present Value, NPV).

3) Upgrading an existing SDH network for the integration ofEthernet WAN services can provide a return on investment inas little as three months by integrating different trafficstreams into a single backbone.

Siemens´ aim is to assume a leading position in NGNconvergence solutions. This will keep the strategicallyvital value creation chain for building the NGN fully inSiemens’ hands. Base technologies for the NGN will continueto be provided through in-house research and development(R&D) activities.

Annual expenditure on NGN research and development is currently running at some 1.2 billion euros. In this fiscal alone, some 260 million euros of this will go into developing Surpass technology for next generation communication networks. Over the coming years it will be plowing an additional nine-figure euro sum in R&D to expand and consolidate its leading position in the area of Next Generation Optics. In doing this, Siemens is acknowledging the key importance of optics as a base technology for the NGN.

Furthermore, Siemens IC Networks has been strategicallysuccessful in reorienting its portfolio and gained furtherstrength in crucial areas through numerous portfoliomeasures.

The Siemens subsidiary Unisphere Networks Inc.,for example, was recently sold to the US company JuniperNetworks, a leading supplier of internet routers. At thesame time, Siemens and Juniper Networks concluded apartnership deal bringing together Siemens’ global presenceand customer base and Juniper Networks’ IP productportfolio.

This will create a unique offering of NextGeneration voice solutions with comprehensive IP routing(core and edge) technology. As a systems integrator with NGNproject know-how, Siemens can now offer telecommunicationscarriers complete solutions with softswitches, gateways andIP routers. This underscores Siemens’ goal of assuming aleading position in the global Next Generation Networksmarket with its Surpass product family.

Siemens Information and Communications Networks Inc.