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Siemens Enters Router Arena with Acquisition of Harbour Networks Products
[January 02, 2006]

Siemens Enters Router Arena with Acquisition of Harbour Networks Products

TMCnet Associate Editor

Siemens, the world’s third largest mobile telecom network equipment supplier, has reportedly acquired core assets of
Harbour Networks Co., a broadband IP network equipment provider in China, for $110 million in cash.

According to a
news report, Siemens officially signed the purchase agreement with Harbour Networks on Dec. 23. As part of the deal, Siemens will acquire the Beijing-based company’s technologies and patents for high-end broadband products, as well as about 100 of Harbour Network’s engineers. The profit generated from these assets reportedly accounts for approximately 60 percent of the total.

According to a report in
China Business News, Siemens has purchased Harbour Networks’ Power Hammer core router, PowerHammer ESR multiservice edge router, and Big Hammer metro switch. After the sale, Harbour will still have all of its VoIP and optical transmission businesses, as well as its low end broadband products. It will retain its Hammer 10000 IP DSLAM and its OpCity multiservice optical transport platform, among other products.

A source close to Harbour Networks management reportedly told China Business News that Harbour Networks is short of cash and that CEO Li Yinan plans to use the money from the sale to buy back shares from Harbour Networks investors.

The deal marks Siemens’ entry into the router arena. The company sells carrier Ethernet switches, however, it has relied on a reseller deal with Juniper Networks Inc. for its routers. Some industry experts have said the relationship between the two companies may become strained if Siemens starts to sell its own router products.

Siemens made news in December when it announced that it will be collaborating with Chinese broadband operator Shanghai Telecom and Shanghai Media Group to offer IPTV to 5,000 households in the Shanghai borough of Pudong at the end of February.

According to a
news release, Shanghai Telecom has been testing the Siemens SURPASS Home Entertainment solution and is banking on industry analysts’ predictions that China’s IPTV subscribers will grow to about 4.5 million by 2008. There are an estimated 25 million broadband users and 360 million television viewers in China, many of whom are expected to migrate to IPTV services over the next five years.

For more information about Siemens, visit

Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit
Patrick Barnard’s columnist page.

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