Nokia to buy Siemens' stake in NSN joint venture

The joint venture was launched in 2007 and struggled to make profits initially

Nokia has agreed to buy Siemens' 50% stake in their joint venture, Nokia Siemens Networks (NSN), for 1.7bn euros ($2.2bn; £1.5bn).

The deal comes at a time when NSN has started to show profits after a series of cost cutting measures.

Nokia, once a market leader in the mobile phone market, has struggled in that sector amid increased competition.

It said NSN, which makes telecom network equipment, would help it grow in areas such as broadband technology.

"Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity," Nokia chief executive Stephen Elop said in a statement.

"Nokia is pleased with these developments and looks forward to continue supporting these efforts to create more shareholder value for the Nokia group," he added.

Shares in Nokia were down almost 2% in mid-morning trade, while Siemens' shares were up 0.3%.

The joint venture was launched in 2007 but struggled to make profits in the early years.

Its fortunes were hurt by a slowdown in demand after the global financial crisis struck in 2008.

At the same time, it also faced stiff competition from Chinese telecom equipment makers such as Huawei and ZTE.

However, NSN introduced cost cutting measures and in November 2011 announced 17,000 job cuts, which accounted for 23% of its workforce.