Siemens buys majority stake in Chinese JV

FRANKFURT: German engineering conglomerate Siemens has acquired a majority stake in its Chinese telecoms equipment joint venture Beijing International Switching System Co Ltd (BISC).

Siemens said it had upped its stake to 67 from 40 percent in the joint venture, which makes digital switching systems for fixed-line phone communications, expanding its base in the world's biggest telecoms market.

Industry sources said Siemens had paid a low double-digit million-euro figure for the increased stake in BISC, which has annual sales of just under 200 million euros ($240 million).

Anton Schaaf, who will be a board member in Siemens' new merged mobile and fixed-line telecoms unit Siemens Communications, said he expected the number of Chinese phone subscribers to rise sharply over the next three years.

By 2007 he sees the number of mobile phone customers rising to half a billion from more than 290 million today and the number of landline subscribers rising to 330 million from 270 million, he said in a statement.

"Investments like the one we are now making in our joint venture, in which we had formerly held a minority interest, demonstrate how much weight China will continue to have for Siemens Communications," he added.

Siemens will expand research and development at the joint venture, now to be called Siemens Communication Networks Beijing (SCNB), tripling the number of developers to 300 and expanding its product line to include high-speed DSL (digital subscriber line) modems, Schaaf said.

BISC was formed in 1990 as Siemens' first manufacturing joint venture in China. It currently has 1,200 employees, who will be transferred to the new company.