Nokia outsources part of R&D for mobile networks

In an effort to gain flexibility and speed, Nokia said Thursday that it would outsource part of its research and development (R&D) for mobile networks.

Starting October 1, Finnish-Swedish IT services company TietoEnator will take on about 300 Nokia employees in Finland and establish a business unit dedicated to Nokia's R&D operations, Nokia said in a statement.

TietoEnator will do software development, testing and maintenance work related to the mobile core network for both present-day 2G (second-generation) and forthcoming 3G (third-generation) mobile networks and TETRA (Terrestrial Trunked Radio) networks. TietoEnator will also work on Nokia's switching platform, Nokia said.

TETRA-type networks are mobile radio communication networks primarily used by authorities such as police and fire departments.

By outsourcing part of the R&D, Nokia hopes it will be able to come out with products using the latest technology faster, said spokeswoman Arja Suominen. Nokia's largest competitor in the mobile networks arena is Sweden's L.M. Ericsson Telephone Co.

"There will be new technologies coming to the market. First 3G networks and then all-IP based networks. The cooperation with TietoEnator will make us more flexible and allow for faster development cycles," she said.

Nokia would rather not call the agreement an outsourcing agreement, said Suominen.

"I don't want to call this a traditional outsourcing agreement because cost isn't the main driver and it is also not a people issue. We call it a cooperation to broaden our R&D base," she said, adding that Nokia and TietoEnator aim at a long-term cooperation. Financial details of the agreement are being kept confidential.

The agreement is subject to approval by the Finnish competition authorities, Nokia said.

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