Nokia Corporation (ADR) (NYSE:NOK) and Siemens AG (ADR) (NYSE:SI) had a pretty good alliance with their Nokia Siemens Networks (NSN) joint venture over the last six years, as it was an opportunity for both companies to develop a pretty reliable source of revenue. Alas, after this partnership came to a legal end in April, Nokia pulled the trigger and agreed to buy out Siemens of its 50-percent state in the venture for a little more than $2 billion.
While the deal is expected to be approved and finalized sometime during this quarter (pending standard regulatory approval), Nokia Siemens Networks is still viable as a joint venture and still makes deals. And this most recent one will likely keep improving the venture’s footprint in emerging markets like Asia and the Middle East. This week, perhaps as one of the last major deals for Nokia Corporation (ADR) (NYSE:NOK) and Siemens AG (ADR) (NYSE:SI) as a joint venture, Nokia Seimens Networks announced a $325 million agreement with Mobily in Saudi Arabia to upgrade its entire telecom network from 3G to 4G LTE within the next 18 months.
This deal follows on the heels of a recent announcement that the world’s largest wireless carrier, China Mobile Ltd. (ADR) (NYSE:CHL) is working with Nokia Siemens Networks to deploy about 200,000 LTE base stations in its coverage area by the end of this calendar year, which will be a further boost to both companies’ revenues as the Nokia Corporation (ADR) (NYSE:NOK) – Siemens AG (ADR) (NYSE:SI) partnership fades into the distance.
In the first quarter of this year, Nokia Siemens Networks posted more than $3.6 billion in revenues, though the Middle East had accounted for less than 10 percent of that total. This deal with Mobily alone matches the single-quarter revenue total for the NSN from the region. Meanwhile, the Asia Pacific region is the biggest boon for the venture (which makes sense, considering the expanding customers base for smartphones in India, China, Malaysia and Indonesia), accounting for nearly a third of the revenue.