Swedish telecom giant is facing a tough enemy as Finnish-German telecom equipment maker Nokia Siemens Networks (NSN) has appointed Rajeev Suri of India as chief executive officer.

Rajeev Suri, 41, takes up the post on October 1 and currently heads the Services business of Nokia Siemens Networks, the world’s second-biggest maker of telecommunications equipment after Sweden's Ericsson.

“Rajeev takes on the role of CEO as a proven leader who has most recently demonstrated his abilities with the transformation of Nokia Siemens Networks’ Services business. His deep experience in customer-facing and product-related roles makes him an ideal leader for the company", said Rudi Lamprecht, Vice Chairman of the Board of Directors of Nokia Siemens Networks.

Nokia Siemens was created four year ago as a joint venture to take on market leader Swedish Ericsson. Rajeev Suri is now expected to step up the fight with its Swedish rival, boost its market share and improve profits. But it won't be easy.

"Nokia Siemens is between the devil and the deep blue sea -- it's neither a technology leader nor a cost leader," said Richard Windsor, global technology specialist at Nomura, to Reuters. "The key for us is gross-margin recovery, and at the moment that's looking like a pretty tough thing to do."

The change in power follows a difficult second quarter as sales fell 21 percent and its gross margins shrank to 28 percent from 31.5 percent a year earlier. And in July Ericsson snatched a prestigious deal with Canadian Nortel under Nokia Siemens Network’s nose. Nokia has said that they expects Nokia Siemens products and services to contract about 10 percent this year.

Rajeev Suri is replacing Simon Beresford-Wylie who decided to step down.

"I've been around (the industry) a long time, and it's a very opportune time for change, both for my family and the company," Beresford-Wylie told Reuters.