China Signs $1 Billion GSM Deal

The mouth watering riches of the Chinese mobile GSM market to foreign companies saw one of its first returns this week when China signed a $1 billion agreement with Sweden’s Ericsson to provide networking equipment to China Mobile Communications Corp.

China's President Hu Jintao signed the deal during a state visit in Stockholm with Ericsson Chief Executive Carl-Henric Svanberg. “We have a third of the telecom market in China so this was another significant step in that development," Svanberg told reporters. Deliveries have already started.

China Mobile, the country's largest telecom, is expected to launch 3G services in late 2007 or early 2008, using a Chinese technology known as TD-SCDMA. Ericsson said its equipment will be used to boost China Mobile's GSM coverage in 19 regions of China.

Foreign companies such as Ericsson and Nokia-Siemens already dominate Chinese legacy networks although Chinese companies are also benefitting with ZTE Corp., for instance, signing an agreement worth some $312 million also with China Mobile, to construct a TD-SCDMA network.

China Mobile wants to expand its network capacity especially in rural areas where the population clamors for mobile service even though earnings are far less than in the cities. 

As of the end of April, China Mobile had 321.3 million subscribers while China Unicom had 110.3 million. – Philip Stone June 11, 2007

Keywords:China media,mobile media

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