Big changes in telecoms sector
By Li Weitao (China Daily)
Updated: 2006-06-21 09:05
The merger of the telecoms equipment businesses of Nokia and Siemens is
expected to create the world's third-largest telecoms infrastructure
company.
Analysts said the deal is part of the ongoing consolidation of
the global communications market, but it will also have a big impact on the
Chinese market.
"The Alcatel-Lucent merger has accelerated the pace of
rationalization in the communications equipment market," said Robert Clark, a
Hong Kong-based technology analyst.
"It makes for three very big
players Alcatel/Lucent, Nokia/Siemens and Ericsson/Marconi and makes
smaller players such as Nortel Networks and Motorola more
vulnerable."
Alcatel in April announced it would acquire Lucent which
will create the world's top telecoms gear maker in terms of annual
sales.
Motorola and Nortel "are doubtless looking for partners now," said
Clark. "There will surely be more mergers and acquisitions (M&As) as we go
forward."
Analysts said China's top telecoms equipment makers Huawei
Technologies and ZTE Corp might seek to join hands with Motorola or
Nortel.
Huawei was rumoured to be one of the bidders for British
communications firm Marconi. Ericsson finally won the bidding last October and
bought most of Marconi's assets for US$2.1 billion.
Motorola is less
likely to be a target for Huawei or ZTE as there might be some political hurdles
in the United States, analysts said.
But the financially troubled Nortel
is a likely target. Huawei earlier announced it would form a joint venture with
Nortel to develop broadband products. The joint venture has reportedly been
called off. But Huawei and Nortel may be forced to join hands again for even
broader partnerships after the merger deal between Nokia and
Siemens.
"Siemens is very strong in emerging markets, particularly Latin
America. The combined company (with Nokia) will have a deeper penetration
capability in those markets, which creates more challenges for Huawei and ZTE,"
said X. J. Wang, a Boston-based telecoms analyst with research firm Ovum.
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