Principal Analyst & Co-Founder Michael Howard says, “As another telecommunications equipment mega consolidation play arrives touting the many obvious synergies of size to serve the major telecommunications carriers, let us not forget that the spur was set in the side of the supplier segment by the emergence of the aggressively lower-cost Chinese suppliers. In the end, profitability and a lower cost of operations will rule--remember Marconi? The final proof of a good merger is a profitable, still-standing business five years from now.
Analyst Richard Webb says The focus of the Siemens-Nokia deal is on quadruple play broadband and fixed-mobile convergence, both of which have shown up in our recent studies as being very much at the forefront of carriers' strategic thinking.
“A Siemens-Nokia partnership looks to be a genuine symbiosis, without too much overlap. In our tracking of the radio access network equipment market, Nokia is definitely A-list, especially in the 3G segment, and combining this with the strength of Siemens in long haul and core and edge fixed networks will create a carrier network heavyweight that could be more than the sum of its parts, a case of 2+2 = 5.”
Whilst Jeff Heynen sees that as network operators converge their wireline and wireless networks to more efficiently deliver voice, data, and video services, manufacturers have to join forces to create the scale and expertise necessary to provide end-to-end support. What this joint venture brings is experience and success in both wired and wireless networks. More importantly, for the world's largest operators, it gives them one throat to choke when the inevitable problems arise.