COMMUNICASIA: Ericsson exec says Nokia-Siemens tie-up expected

SINGAPORE—Ericsson sales and marketing executive vice president Bert Nordberg today said that the network joint-venture between Nokia and Siemens was a development Ericsson expected due to the need for consolidation in the industry. But he added that while that while the Nokia-Siemens venture and the upcoming merger of Alcatel and Lucent Technologies will create two global infrastructure powerhouses, Ericsson will still be at the top of the heap in overall equipment sales.

“This is a scale game,” Nordberg said at a media conference at CommunicAsia today. “The investment in R&D in this industry is so large, if you don’t have scale, you can’t compete.”

While Nordberg would not comment on whether Ericsson is expecting further consolidation in the industry, he said the that along with Ericsson, a combined Alcatel-Lucent and a combined Siemens-Nokia would be the only three players with the R&D economies of scale to compete globally in the a rapidly consolidating telecom industry.

Specifically speaking to the Nokia-Siemens joint venture Nordberg said Nokia was already a powerful player in the GSM networks market but the alliance with the German vendor will give Nokia a clear convergence strategy, as well as significant wireline business. As for new competitive pressures from the new company, Ericsson doesn’t forsee any threats, Nordberg said. Instead of competing with both companies separately, Ericsson would merely be competing with a combined entity if the venture passes regulatory muster he said.

“We have deep competitive information on how to compete against both of them.”