UPDATE 1-Nokia Siemens axes 3,500 in Latin America deal exit

* Cuts in addition to 17,000 job losses announced last year

* No cost to company in pulling plug on support deal (Adds comments, background)

By Tarmo Virki

BARCELONA, Feb 29 (Reuters) - Nokia Siemens Networks has cut 3,500 jobs by exiting a large services deal in Latin America, part of the telecom equipment vendor's strategy of focusing on higher-margin businesses, its chief executive told Reuters.

Rajeev Suri said the latest move would be in addition to the 17,000 job cuts -- almost a quarter of the group's workforce -- announced in November.

The contract it is dropping involves low-end installations and support, and the exit resulted in no cost to the company, Suri said. "It was mutually agreed and the contract was handed back to the client," he said in an interview.

Formed by Nokia and Siemens in 2007, Nokia Siemens has struggled for profitability due to pricing pressure from Chinese rivals and Sweden's Ericsson.

Chairman Jesper Ovesen told Reuters this month the company would be more selective on deals and prioritise profitability.

Suri said it had decided where half the 17,000 job cuts would be made, and has begun the process in 55 countries.

Asked about business in India, where the Supreme Court has ordered telecoms licences issued in a 2008 sale to be revoked, Suri acknowledged the impact on capital spending in the industry.

"Capex in India is down a lot," Suri said, adding Nokia Siemens was not affected as it had business there before 2008. (Editing by David Hulmes)