Siemens and Huawei to Form a Joint Venture for TD-SCDMA: Siemens Will Hold 51 Percent, Huawei 49 Percent - USD 100 Million Investment.

Business Editors/High-Tech Writers

BEIJING--(BUSINESS WIRE)--Aug. 29, 2003

The Siemens Information and Communication Mobile Group (Siemens mobile)(NYSE:SI)(FWB:SIE) and Huawei Technologies Co., Ltd., today announced, that they will join forces to promote the upcoming mobile communication standard TD-SCDMA. The two companies have signed a Memorandum of Understanding to form a joint venture to develop, manufacture and market TD-SCDMA technology. The new company, with an investment exceeding USD 100 million, will be based in Beijing. Siemens mobile will hold 51 percent of the joint venture, leading Chinese telecommunication player Huawei Technologies 49 percent. Christoph Caselitz, President of Siemens mobile Networks, and Xu Zhijun, President of Huawei Wireless Business, both expressed confidence that their combined strengths and know-how will give TD-SCDMA the necessary push for a market success in China.

Complementary to GSM and W-CDMA, TD-SCDMA technologies and products have become mature. The Chinese Ministry of Information Industry allocated 155 MHz spectrum to TD-SCDMA in October 2002, paving the way for the commercial use of the standard in China. Both Siemens mobile and Huawei Technologies are confident that TD-SCDMA succeeds in the Chinese market and could encourage operators outside of China to adopt the standard. The TD-SCDMA standard can satisfy the requirements for stand-alone networks for large geographic coverage, and can also provide complementary solutions to GSM or W-CDMA networks to meet specific market demands.

Manufacturing and Marketing efforts of the joint venture will initially be focused on China while emphasizing on the market introduction of TD-SCDMA Radio Access Network (RAN) infrastructure products in a starting phase. TD-SCDMA infrastructure products are undergoing field tests currently in China, first commercial products of the joint venture will be available in China at the beginning of 2004. The joint venture's products will help operators to attract more mobile phone subscribers especially in low-penetration areas, while also being applied for the rollout of highly efficient networks to cover existing and future demands. Operators of TD-SCDMA networks will be able to fully satisfy the increasing demands of mobile consumers.

Both companies bring to the table decades of experience in telecommunication technology. Siemens started its development in TD-SCDMA back in 1998 and has been investing more than USD170 million so far. Today, several test networks running in China are proving that this technology is mature. Siemens will be contributing to the joint venture development know-how and products as well as 160 Siemens employees already working in Beijing.

Siemens mobile Networks President Christoph Caselitz said: "We are proud to work with Huawei Technologies, a partner who shares the same vision and aspiration for TD-SCDMA. Together, we will make TD-SCDMA a success in China. Siemens mobile is able to offer both technologies TD-SCDMA and W-CDMA to Chinese mobile operators. It is Siemens' stated objective to be the 3G market leader in China." With 240 million mobile phone subscribers today, China is the world's largest mobile communication market.

"We are looking forward to co-operating with Siemens mobile, a leader of mobile communications," expressed Xu Zhi Jun, President of Huawei Wireless Business. "The cooperation will quickly push TD-SCDMA technology into the commercial business and optimize development costs for both of us. Huawei has always been synchronously developing 3G products on a worldwide basis, and will deliver state of the art 3G products and solutions through partnerships with top companies in the telecommunications industry."

The Siemens Information and Communication Mobile Group (Siemens mobile) offers a complete range of mobile solutions including mobile devices, infrastructure and applications. Devices include mobile phones, wireless modules, mobile organizers and cordless phones as well as products for wireless home networks. The infrastructure portfolio includes GSM, GPRS and 3G mobile network technologies from base stations and switching systems to intelligent networks, e.g. for prepaid services. Mobile Applications cover end-to-end solutions for Messaging, Location Based Services or Mobile Payment. For fiscal 2002 (September 30), Siemens mobile recorded sales of EUR 11 billion and employed approximately 28,600 people worldwide.

You can access press releases, photographs and further information on the Internet at:

http://www.siemens-mobile.com/press

Huawei Technologies Co., Ltd., established in 1988, is a high-tech enterprise which specializes in research and development (R&D), production and marketing of communications equipment, providing customized network solutions for telecom carriers in optical, fixed, mobile and data communications networks. As a non-state-owned business, Huawei Technologies is one of the key suppliers in China's telecommunications market, and has been achieving great successess in international markets. For 2002, Huawei Technologies reached total sales of RMB22 billion and employed more than 22,000 people worldwide.

For more information on Huawei Technologies, please visit http://www.huawei.com

Further information on TD-SCDMA is available on the Internet at:

TD-SCDMA Forum: http://www.tdscdma-forum.org, and

Siemens mobile: http://www.siemens-mobile.com/tdscdma

Any statements in this document that are not historical facts are forward-looking statements that involve risks and uncertainties; actual results may differ from the forward-looking statements. Siemens AG undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.