Nokia and Siemens are merging their phone network businesses.

The new company, dubbed Nokia Siemens Networks, is a 50-50 joint venture that will cover both fixed line and mobile networks.

If the company had existed in 2005 it potentially would have brought in revenues of €15.8bn. Based on current market share it will be second largest company in mobile infrastructure, second in services, third in fixed infrastructure, and third largest in overall telecoms infrastructure.

The companies are predicting cost savings of €1.5bn by 2010, which will mean "headcount adjustment" of 10 to 15 per cent of a total workforce of 60,000. Savings will also be made by combining R&D and other overlapping functions.

The firm will be headquartered in Helsinki, Finland, with a regional headquarters in Munich, Germany.

Nokia networks manager Simon Beresford-Wylie will become chief executive of Nokia Siemens Networks. Nokia president and chief operating officer Olli-Pekka Kallasvuo will take the role of chairman of the new firm.

The deal should close 1 January 2007.

Read the whole press release on Nokia's website here. ®