Nokia Siemens Networks and Deutsche Telekom have today signed a wide-ranging partnership agreement that places Nokia Siemens Networks as a strategic partner to Deutsche Telekom. Under the terms of the agreement, Nokia Siemens Networks will assume control of Vivento Technical Services (VTS) - a division of Vivento, Deutsche Telekom's personnel service provider - and has signed a managed services contract valued at nearly €300 million over the next five years. In addition, Deutsche Telekom has also selected Nokia Siemens Networks to deliver a range of capital expenditure projects for several T Mobile affiliates in Europe, including next-generation IN (Intelligent Network), valued at up to €150 million.
The companies have agreed to make Nokia Siemens Networks a preferred services partner for Deutsche Telekom for upcoming outsourcing and managed services projects. With this agreement, Nokia Siemens Networks becomes a major supplier for managed services in Europe further increasing its strong international position in managed services. The asset deal is expected to close at the beginning of next year and includes the transfer of VTS assets to Nokia Siemens Networks, as well as additional support from Deutsche Telekom to ensure a successful transition of VTS to Nokia Siemens Networks.
"This agreement is proof that Nokia Siemens Networks is the right partner for Deutsche Telekom in the industry's trend to outsource services," said Rajeev Suri, head of Services at Nokia Siemens Networks. "The integration of VTS into our portfolio supports our strategy of transforming into a services and solutions company and helps us become one of the leaders in the European managed services market. By combining the Managed Services contract and the next-generation equipment agreements with ongoing partnership and support from Deutsche Telekom, we see this as a compelling opportunity for Nokia Siemens Networks."
With the addition of VTS, Nokia Siemens Networks has the increased ability to address the multi-vendor maintenance, installation and commissioning services market within Deutsche Telekom and with other customers across Germany. Under the agreement, Nokia Siemens Networks will deliver a range of managed services to Deutsche Telekom, including a single point of contact for managed maintenance and systems integration, as well as providing build, operate, care and transfer services for major Deutsche Telekom roll-outs in the next few years. The integration of VTS will complement the capabilities of Nokia Siemens Networks in managed services and raise its share in this growing market in Germany by allowing it to increasingly offer installation, commissioning and maintenance services to operators other than Deutsche Telekom.
"We are delighted that by securing this deal with Nokia Siemens Networks, we are partnering with one of the leading providers of global communications services, enabling the employees of VTS to go after new opportunities and customers in the German market," said Dr. Martin Walter, Chairman of the Supervisory Board of Vivento Technical Services.
Deutsche Telekom will support the continued business development of VTS by committing to use its service delivery capabilities, by placing additional service contracts with the company.
In a very fragmented market consisting of thousands of sub-contractors, cost and resource co-ordination are key factors. VTS is said to offer a promising entry point into the German infrastructure services market which, according to Nokia Siemens Networks internal estimates, is expected to grow annually by around 6%, reaching €1 billion by 2010. With VTS, Nokia Siemens Networks will improve its time-to-market and open up growth opportunities by increasing efficiency and building market share in Germany's managed services market.
"With more than 160 managed services and outsourcing contracts we have a strong track record of integrating employees from customers and delivering a successful business and we will do so with VTS", said Suri. "The scope of the deals we are announcing today strengthens Nokia Siemens Networks' position as a preferred supplier to Deutsche Telekom and positions us well for Deutsche Telekom's upcoming deployment projects across Europe," said Suri.
"As part of the strategy announced by Deutsche Telekom in 2004, close to 2000 VTS employees will transfer in an asset deal for VTS, which will become a wholy-owned affiliate of Nokia Siemens Networks. Deutsche Telekom will support the continued business development of VTS by committing to use its service delivery capabilities and also by placing additional service contracts with the company", said Dr. Martin Walter.