Telecommunications infrastructure company Nokia Siemens Networks (NSN) plans to cut almost 28% of its 570-strong workforce in South Africa, as Chinese companies - such as Huawei and ZTE - increasingly gain market share in this sector.

This is according to a report in South Africa’s Business Day newspaper that has said NSN’s move to cut 160 jobs also forms part of the joint venture’s global strategy to reduce costs and focus more on mobile broadband.

NSN has closed the fixed line business and will focus on its mobile business, South African trade union Solidarity told Business Day.

The joint venture’s global restructuring is expected to see a loss of 17000 jobs out of its 74000 workforce as part of a bid to reduce its annualised operating expenses and production overheads by €1bn by the end of next year.

South African trade union Solidarity has said that more than half of the 160 employees have accepted severance packages, according to the Business Day report.

However, NSN has not commented on how many employees had already left.

Solidarity further said that another reason for the retrenchments could be that NSN "wishes to shrink its SA branch because it can do many of the functions done here much cheaper from Kenya".

Rufus Andrew, managing director of NSN SA, said the restructuring was part of the global workforce reduction process and "does not reflect our business in SA".

Mr Andrew said the company took a decision globally to focus on mobile broadband, including optical, "customer experience management and services".

"We believe this is the future direction of our industry and we will intensify our strategic focus on these areas. It is where we see the opportunity for profitable growth as a business ," he said.

Nokia Siemens GPRS base receiver market share

In terms of the GPRS base receiver stations segment in Africa, Ericsson and Huawei respectively have a 38% and 29% market share, according to Informa Telecoms & Media. Meanwhile, Nokia Siemens occupies third spot in this segment with a 22% market share.