Nokia Siemens warns of market slowdown

Monster vendor Nokia Siemens, which started operations as a merged entity on Sunday, has warned of a slowdown in growth of the infrastructure market.

The Finnish-German joint venture said that “over the last couple of months there has been a narrowing of visibility and indications of a slowdown in spending in some regions”.

Updating its outlook for the mobile and fixed services infrastructure market this year, the equipment manufacturer now expects only “very slight” market growth for the mobile and fixed infrastructure and related services market.

In preparation for the slowdown in growth, Nokia Siemens has already said that a substantial portion of cost reductions are expected to be realised via a reduction of 10 to 15 per cent of the initial combined staff base of approximately 60,000 – or 6,000 to 9,000 over the next four years.

Estimated cost synergies of Eur1.5bn annually by 2010 are expected to come primarily from the elimination of overlapping functions, consolidation and better utilisation of sales and marketing organisations, reduction of overhead costs, sourcing benefits, and greater efficiencies in R&D, the companies said.