Nokia on Monday announced the merger of its telecom network operations with Siemens and a shifting of base to India. The two also agreed to merge their equipment divisions into a joint company.

Only recently, Alcatel SA of France and Lucent Technologies of the United States agreed to merge. Meanwhile, Ericsson said last year it would pay $2.2 billion to acquire the network-equipment business of UK-based Marconi Corp.

Canada''s Nortel Networks Corp and China''s Huawei Technologies Co also face heightened pressure to consolidate.

The Nokia-Siemens combine expects to generate annual revenues of $20 billion. The new company will be No. 3 in terms of sales, just behind a post-merger Alcatel SA-Lucent Technologies and Telefon AB LM Ericsson of Sweden.

The Munich, Germany-based Siemens is also in talks with various parties to sell a majority stake in its enterprise unit, which supplies equipment and service packages for telecommunication companies.

Although no money changed hands in the 50:50 deal, Siemens, which was holding on to a losing telecommunication business, had to offer a discount to Nokia, which runs a profitable network-equipment business. Siemens will contribute $11.57 billion of revenue and Nokia $8.3 billion in the new business. Nokia will have four members on the board while Siemens will have three.

Siemens telecommunications business includes both fixed-line and wireless equipment. Nokia, which has been focused on wireless equipment, will thus gain access to fixed-line equipment with the merger.

The combined company will have its headquarters in Helsinki. The company has a combined employee strength of 60,000, which will be reduced by 10 to 15 per cent over the next four years.