Siemens spins off network services

Siemens AG is selling off three divisions to form Omnetica, a European network services company with 400 m euros in annual revenue. Equity house KKR (Kohlberg Kravis Roberts) is buying out Siemens Network Systems Limited (SNSL) of the UK, and the Siemens-owned Arche Communications of France and PRES of Italy. "The biggest growth area in the Omnetica businesses is (voice-data) convergence," said former head of SNSL Peter Halls, who becomes chief executive of Omnetica. "SNSL had installed less than a thousand seats of Voice on IP at the beginning of 2002, and we have put in 4000 more seats in the first three quarters of this year." "Two years ago convergence was hyped," he explained, "but the technology is beginning to justifiy itself. People expect stability from their voice technology and this is being achieved." Omnetica will also provide security, storage and network monitoring services. SNSL's roots go a long way back in the history of IT in the UK: as ACT Cablestream it was part of a group developed from the historic Apricot company, and dealt with structured cabling. Before that it was part of ITL, a company which built Unix boxes in the 1980s. Siemens bought SNSL, Arche and PRES around 1995, but has since decided to exit services and focus on manufacturing. "KKR has a history of running an IT portfolio," said Halls. "It also bought the Nixdorf retail and banking business from Siemens." Siemens will retain 19 percent of Omnetica.

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