Siemens hand is forced over GPT

Siemens hand is forced over GPT
Richard Wilson Siemens has seen telecommunications equipment orders with public telephone operators fall in the first half of the year, putting new pressure on its involvement with GPT. In response to the situation, the German engineering group has announced a major restructuring programme for its computer and telecoms businesses. While sales of public telephone systems such as exchanges and transmission systems were 28 per cent up in the year’s first half, future business looks less strong as orders slumped by seven per cent on the same period last year. This may have a bearing on talks taking place between Siemens and GEC about the future of GPT, their telecoms joint venture. Recent reports suggest that Siemens has at last accepted the selling of its 40 per cent stake in GPT to GEC. GPT’s business has been dominated by sales to the public telephone operators since the business systems activity was spun-off into a separate company last year. Signs of pressure in this market could convince Siemens, which has its own substantial telecoms business, to sell its interest in GPT before the formation of the new computer and communications services groups in October. Siemens has warned that it may not meet its profits target of DM3bn ($1.7bn) this year. The German engineering group blamed several factors including the fall in DRAM memory prices as well as the economic crisis in south east Asia.


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