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Finnish handset maker Nokia has bought Siemens AG stake of the Nokia Siemens network equipment joint venture. The deal was struck at $2.2 billion and it should ease up the pressure of dwindling smartphone sales for the company. After all, Nokia Siemens Networks is a known profitable venture.
Nokia Siemens Networks, joint venture was officially launched at the 3GSM World Congress in Barcelona in February 2007. The company, later began it's full operations on 1 April 2007. On 23 November 2011, Nokia Siemens Networks announced that it would refocus its business on mobile broadband equipment. The company now operates in more than 150 countries worldwide.
The company experienced a turn around in profits, when it started implementing cost cuts on it's products. NSN's focus towards fourth-generation (4G) Long Term Evolution (LTE) networks has has also payed off well.
Reportedly NSN's earnings amounted to 196 million euros, in the first quarter of this year. "Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity," Nokia Chief Executive Stephen Elop said in a statement.
Nokia has said that the transaction is expected to be be finalized somewhere around Q3. After the deal, Nokia Siemens Networks to become a subsidiary of Nokia as a whole. Reportedly Siemens name will will be passed out and a new name and brand will be appointed.
"With this transaction, Nokia buys itself a future, whatever happens in smartphones and feature phones," Bernstein analyst Pierre Ferragu wrote in a note to clients.