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The merger of the telecoms equipment businesses of Nokia and Siemens is expected to create the world's third-largest telecoms infrastructure company.

Analysts said the deal is part of the ongoing consolidation of the global communications market, but it will also have a big impact on the Chinese market.

"The Alcatel-Lucent merger has accelerated the pace of rationalization in the communications equipment market," said Robert Clark, a Hong Kong-based technology analyst.

"It makes for three very big players  Alcatel/Lucent, Nokia/Siemens and Ericsson/Marconi  and makes smaller players such as Nortel Networks and Motorola more vulnerable."

Alcatel in April announced it would acquire Lucent which will create the world's top telecoms gear maker in terms of annual sales.

Motorola and Nortel "are doubtless looking for partners now," said Clark. "There will surely be more mergers and acquisitions (M&As) as we go forward."

Analysts said China's top telecoms equipment makers Huawei Technologies and ZTE Corp might seek to join hands with Motorola or Nortel.

Huawei was rumoured to be one of the bidders for British communications firm Marconi. Ericsson finally won the bidding last October and bought most of Marconi's assets for US$2.1 billion.

Motorola is less likely to be a target for Huawei or ZTE as there might be some political hurdles in the United States, analysts said.

But the financially troubled Nortel is a likely target. Huawei earlier announced it would form a joint venture with Nortel to develop broadband products. The joint venture has reportedly been called off. But Huawei and Nortel may be forced to join hands again for even broader partnerships after the merger deal between Nokia and Siemens.

"Siemens is very strong in emerging markets, particularly Latin America. The combined company (with Nokia) will have a deeper penetration capability in those markets, which creates more challenges for Huawei and ZTE," said X. J. Wang, a Boston-based telecoms analyst with research firm Ovum.

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