Optical/IP Networks

Siemens Steals Nokia Deal

Siemens AG (NYSE: SI; Frankfurt: SIE) has snatched a 3G network contract win out from unter Finnish rival Nokia Corp. (NYSE: NOK), a deal estimated to be worth a total of €200 million (US$238 million) over the next six years.

In March 2001 Nokia announced it had been chosen by NetCom AS -- Norway’s second largest wireless carrier -- as the main radio access network (base station) supplier for its UMTS network.

Three years on, and Nokia has been slapped with the cold haddock. A statement from Siemens yesterday declares that the German vendor has added to a standing deal in southern Norway and will now provide UMTS radio and core equipment throughout the whole country.

UMTS is the 3G upgrade to the GSM (Global System for Mobile Communications) standard, using a wideband-CDMA (W-CDMA) air interface on top of the GSM core network to increase voice capacity and boost data-transfer speeds to a possible 2 Mbit/s.

UMTS core network equipment includes packet-based elements such as Serving GPRS Support Nodes (SGSNs), GPRS Gateway Support Nodes (GGSNs), and IP routers, as well as circuit-switched equipment such as mobile switching centers. It may also include backbone transport equipment (see A Wireless Taxonomy for more detail).

According to the statement, “this agreement makes Siemens the sole supplier to NetCom of infrastructure technology.” (See Siemens Upgrades Netcom.)

“NetCom has chosen to consolidate to one vendor,” confirms Nokia’s communications director Thomas Jönsson, adding that NetCom’s decision was not based on network performance issues. “It was purely a commercial decision.”

One anonymous analyst agrees with Nokia’s view, telling Unstrung that the Siemens bid was “just too aggressive for Nokia this time.”

A Siemens spokesfrau states that the deal will be finalized “in the next few weeks,” with network deployment commencing “immediately afterwards.”

NetCom is expected to launch commercial 3G services to its 1.3 million GSM customers by March 2005.

— Justin Springham, Senior Editor, Europe, Unstrung

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