Ericsson moves against Nokia control of Symbian

Swedish telecom equipment manufacturer Telefonaktiebolaget LM Ericsson has become the first of several shareholders in Symbian Ltd. to announce plans to stop rival Nokia Corp. from gaining control of the mobile phone operating system developer.

“Our President and Chief Executive Officer (CEO) Carl-Henric Svanberg has said he intends to exercise the company’s right to increase its stake in Symbian,” said Ericsson company spokesman Peter Olofsson, confirming statements Svanberg made in an interview published Monday in the Financial Times.

In February, Psion PLC agreed to sell its 31.1 per cent stake in Symbian to Nokia in a move that would lift the Finnish phone maker’s total stake in the venture to 63.3 per cent. That deal came less than six months after Motorola Inc. decided to unload its 19 per cent stake in the software company to Nokia and Psion.

Symbian was launched in 1998 by several large handset manufacturers as a venture to control the development of operating system software for smart phones. It competes, among others, against Microsoft Corp., which is trying to extend its dominant position in the PC operating system software market to mobile devices.

In the newspaper interview, Svanberg said Nokia’s stake in Symbian must be under 50 per cent to prevent the software from becoming “a Nokia platform.”

Symbian’s five other shareholders have proportional pre-emption rights, allowing them to purchase a stake in the shareholding up for sale that corresponds to their interest in the venture. While Ericsson owns 17.5 per cent, and its joint venture Sony Ericsson Mobile Communications AB owns 1.5 per cent, Matsushita Electric Industrial Co. Ltd. (Panasonic) holds 7.9 per cent, Samsung Electronics Co. Ltd. five per cent and Siemens AG 4.8 per cent.

Svanberg said Ericsson and Sony Ericsson “would act as a team” in exercising their pre-emption rights. Their combined ownership, he said, would rise to 27.6 per cent.

The Swedish CEO added that if all shareholders exercised their pre-emption rights, Nokia’s stake in Symbian would increase to only 46.7 per cent.

How determined the Finnish company is to wrestle control of Symbian is unclear. While Nokia continues to seek approval for its acquisition of Psion’s stake from competition authorities, it is telling fellow shareholders at the same time that they are welcome to exercise their pre-emption rights.

“Our CEO Jorma Ollila said at the GSM World Conference in Cannes, France, last month that he would be happy to see Symbian’s other shareholders use their pre-emption rights,” said company spokeswoman Maarit Matikka.

Nokia expects to have an agreement on Psion’s stake in Symbian “in the coming months,” Matikka said. After reaching an agreement with Psion, Nokia told the other shareholders that it aimed to continue running the software venture as an independent entity.

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