| INFORMATION AND COMMUNICATION |
Information and Communication continues to account
for most of the growth in the electronics and electrical
engineering industries. This growth is expected to
continue in the foreseeable future and to focus on new
technologies. There is also increasing demand for services
and the outsourcing of IT functions. Growth in the sale of
mobile switches and base stations slowed during the year
under review. The financial year 1998/99 was also the first
for a long time to witness a fall in the demand for networks,
switches and base stations. Despite this, Information
and Communication’s Networks achieved the
group’s best performance. City phone networks proved to
be a rather narrow market, neither have they changed the
dominance of mobile phones to any great extent. Plans
for new investment are shifting towards fast GPRS (General
Packet Radio Services) and third generation UMTS (Universal
Mobile Telephone System) networks. The principal
focus of R&D at Siemens Osakeyhtiö’s Information and
Communication (IC) business group is on third generation
networks and Internet services. Last winter saw the implementation
of the Internode pilot project, a service designed
to integrate Internet technology and the telecommunications
network. Siemens is currently working with
Radiolinja to introduce a GPRS pilot scheme.
Initiatives are currently under way in Finland to push through solutions to optimise use of the fixed-line telecommunications network. Siemens has won orders for broadband subscriber interface networks. Business is growing in this sector. The spread of broadband data networks is contributing to an increase in e-commerce. Siemens’ major customers in Finland include Helsinki Telephone Corporation and its subsidiaries and the Finnet companies. Work progressed with building the telecommunications infrastructure in the Baltic states. Summer 1999 saw Siemens sign an agreement to supply a data network with Latvian-based Lattelekom. Lietuvos Telekomas also placed an order for exchanges with Siemens to build digital EWSD switching systems in 150 localities in Lithuania. Siemens delivered a base station network to MSS Saratov, a GSM operator owned by Telecom Invest of St Petersburg, Russia. This network entered commercial service on 25 August 1999.
Siemens Hicom is the leading business telephone system in the market. Solutions employing Internet-based, so-called IP, technologies are set to grow in the foreseeable future. With the growing convergence of company IT and communications systems, there is an increasing willingness to outsource network management and maintenance.
Siemens cordless Gigaset phones successfully retained their market leadership. Euroset phones also remained among the best sellers. The new small C25 and S25 handsets boosted the mobile telephony business, with demand exceeding expectations.
The year under review saw significant growth in the sale of PCs. The decision made in summer 1999 to establish Fujitsu Siemens Computers BV, a joint venture between Siemens and Fujitsu, provided extra impetus to this fiercely competitive business. In Finland the new company operates as Fujitsu Siemens Computers.
Siemens Business Services (SBS), which earlier operated as a separate company, continued its activities as a business group within Siemens Osakeyhtiö. SBS performed encouragingly in 1999. During the year under review, SBS sold its Fenix and Pegasos software systems business to Novo Group.
A second wave of business management systems is shortly to be launched. The first SAP R/3 systems focused on enhancing the effectiveness of financial and materials management as well as logistics. The next stage of development is to broaden communication between compa-nies, their customers and suppliers. Linking the SAP environment with e-commerce is a major challenge. Competition in the sector is expected to increase. Its extensive experience as an implementer of SAP in Finland coupled with the broad spectrum of products and services offered by Siemens IC business group make SBS well placed to respond to these challenges.
Business services is committed to continuing to further building on the competence of Siemens IC business group. Major projects during the year under review included logistics solutions for Metsäliitto and Metsä Timber Oy. SBS also strengthened its cooperation in the pulp and paper industry with UPM-Kymmene Corporation. Likewise, Siemens IC business group has clearly consolidated its position as a supplier of solutions to the retail trade and the food and telecommunications industries. One major project was a foodstuffs logistics management system delivered to Inex Partners Oy.
Implementation of business management systems is growing at a rate of 50 per cent a year. Siemens believes it is well placed to gain from the potential in this business. Outsourcing, e-commerce and customer service systems will benefit from the competence and synergies of Siemens IC business group. The expertise of Siemens’ own people likewise consolidates the encouraging future outlook.
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Share of group business 55 % |