Nokia Siemens Networks Enters Into Significant Partnership With IBM That Includes Transfer of Research and Development Center Activities in Munich and Berlin, Germany

On September 28, 2007, Nokia Siemens Networks and IBM (NYSE: IBM) signed an agreement including the transfer of specific parts of Research and Development Center activities for four Business Lines of the Service Core and Applications Business Unit to a subsidiary of IBM. Upon closing of this transaction, expected to take place by the beginning of December 2007, up to 235 employees located in Munich and Berlin will become part of the IBM organization. Through this agreement Nokia Siemens Networks will leverage IBM’s global network and experience as one of the world’s foremost R&D organizations, investing more than $6 billion in 2006 and with 14 years of patent leadership.

The transferred Research and Development Center activities include specific parts of R&D for Next Generation Voice and Multimedia; Media Gateway; Mobile Internet Connections; and Consumer and Business VoIP business lines of the Service Core and Applications Business Unit as well as technical support. Entire teams will be transferred and continue to deliver necessary development activities back to Nokia Siemens Networks. They will work together with Nokia Siemens Networks’ program management, product management, architecture, technical support and system level testing to fulfill obligations. Over time, development services will also be offered to other IBM clients as part of the portfolio of the IBM Global Engineering Solutions division, which provides engineering as well as research and development (R&D) services to a variety of industries.
As already communicated on May 4, 2007, the transferring of R&D capabilities to trusted business partners is part of Nokia Siemens Networks’ overall strategy. This step will allow Nokia Siemens Networks to realize greater workforce flexibility and improve cost management, while being able to leverage the expertise of its R&D partners.

“In order to ensure our world-leading technology capabilities and optimum synergies across the Business Lines, we have decided to strengthen our R&D activities by creating a cost efficient R&D structure. This move provides Nokia Siemens Networks with the flexibility it needs to successfully compete in the market,” said Jürgen Walter, head of Service Core and Applications, Nokia Siemens Networks. “Our customers will reap the benefits as this agreement strengthens our capabilities to provide them with high quality software and products.”

“Providing research and development services for Nokia Siemens Networks enables IBM to extend its considerable experience in outsourcing to a new field of collaborative research and development for both Nokia Siemens Networks and other telecommunications industry clients,” said Simon Porter, IBM Global Engineering Services vice president for North East Europe. “Our leadership in this field will ensure that Nokia Siemens Networks will retain the competitive advantage offered by leading edge innovation and improved cost efficiency.”