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Siemens/3Com telephony deal cut off

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3Com and Siemens have canned plans for their $100 million joint telephony venture designed for local corporate networks. But the two firms, who originally announced the move in December, said they would continue to work on similar technology. According to reports on US newswires, the two have decided not to go ahead with the joint venture for fear of rising overhead costs that such a project would incur. The two firms announced a deal earlier this year agreeing to jointly market and sell each other's products. They therefore considered the joint venture unnecessary, said a 3Com representative. According to a recent US Securities and Exchange Commission filing, the existing strategic alliance between the two: "May consider joint development of voice-related enterprise and carrier solutions." However, it continued: "In light of the current strategic relationship, the two companies will not proceed with a previously announced joint venture." Both parties will benefit from today's announcement, said a 3Com representative, because they could pursue the same goals as before, but avoid the costs involved. The agreement initially involved building telephony products for local area networks, such as corporate offices. The two said they were already making products in the project areas discussed, involving voice, video and data traffic. ®

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