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Motorola, Siemens in talks
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October 1, 2001: 1:40 p.m. ET
U.S cellphone titan in talks with German rival over $25 billion wireless venture
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LONDON (CNN) - Shares of Motorola and Siemens slipped in U.S. trading Monday following news that the two are in talks to create a joint venture for either their wireless infrastructure operations or their handset businesses.
Discussions between Motorola, the second-largest mobile phone maker, and German rival Siemens, are at an early stage and could create ventures with a total value of between $20 billion and $25 billion, the Wall Street Journal said.
The talks come as many of the world's biggest mobile-phone makers have been hard hit by the global economic slowdown and the wireless infrastructure business has been hurt as telecom operators curtail spending.
Japan's Sony and Sweden's Ericsson have created a joint venture to produce mobile phones, while Europe's biggest consumer electronics company, Philips Electronics, has restructured its cell phone business.
Finland's Nokia, the world's biggest wireless company, warned on September 11 its third-quarter sales would fall as cellphone operators delayed rolling out new networks. Motorola (MOT: down $0.42 to $15.18, Research, Estimates) has also warned sales will be flat and there will be a wider-than-expected loss in the third quarter.
European wireless operators have spent more than $100 billion on high-speed wireless phone licenses that give them the right to offer voice, internet and video services. The same companies now need to spend as much money on rolling out these networks, but the heavy debt burden taken on has forced them to rethink their strategies.
NTT DoCoMo unveiled on Monday the world's first commercial high speed wireless, also known as third-generation (3G), service in Tokyo. The launch was originally slated to take place in May, but technical hiccups forced DoCoMo to post pone the commercial service by three months.
Although the talks between Motorola and Siemens (SI: down $0.35 to $38.05, Research, Estimates) have been going on since the start of the summer, they still are at a delicate stage and could fall apart, the Wall Street Journal said, adding no announcement was imminent.
If the companies set up two ventures, they will probably divvy up control, with Siemens in charge of one of the ventures and Motorola the other.
Neither firm would comment on the reports. 
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