The restructuring will result initially in the loss of 2,300 jobs at the company's main base in Munich, Germany.
Siemens will merge the three divisions - broadband access solutions, wireline network communications and optical networks - into one known as Carrier Service.
"By forming one new unit, we aim to cut costs in the areas of research and development, sales and administration," said a company spokesman.
The company expects this restructuring move, following several others over the past year, to be among the last as it weathers out one of the sector's worst recessions.
In the first nine months of Siemens' business year, the combined carrier operations posted a loss of €366m ((£230m). In the whole of the previous business year, the carrier business reported a loss of €861m.