Ericsson Deals With China Worth $1.44 bln

Beijing, Ericsson Telephone Co. (ERIC), a provider of telecommunications equipment and related services, on Monday announced the signing of US$ 1.44 billion worth GSM expansion framework agreements with two Chinese mobile operators, China Mobile and China Unicom.

The deals, valued at about US$ 1.3 billion and US$ 140 million, respectively, were signed in a ceremony in Beijing, attended by Chinese Premier Wen Jiabao and Swedish Prime Minister Fredrik Reinfeldt, who is in China on an official visit. The expansion projects are set to be completed in 2008.

China Mobile and China Unicom together provide mobile services to about 550 million subscribers in China. China Mobile has a registered capital of US$ 7.4 billion and assets of more than US$ 100 billion. China Unicom owns gross assets of over US$ 20.6 billion, with total subscribers of 162.5 million by December 2007.

Ericsson said that the expansion projects will allow China Mobile and China Unicom to boost their network capacity and performance, while creating new revenue streams from data services and offering improved user experience.

Under the framework deal with China Mobile, Ericsson will be one of the main suppliers of core and radio network equipment, along with related technical support and services, to expand GSM/GPRS coverage and capacity in 19 regions across China. The Stockholm, Sweden-based company will also provide power-saving features and contribute for the reduction of carbon-dioxide emissions, following the "Green Action Program", a Strategic Cooperation Memorandum previously signed between the two parties.

Under the deal with China Unicom, Ericsson will be the major supplier and help expand GSM networks in 10 regions across China, including Beijing. Ericsson will also supply multimedia solutions for WAP services to help provide new multimedia services and applications.

Deliveries to both operators have already started, Ericsson said. The ceremony was also attended by Wang Jianzhou, president of China Mobile, Shang Bing, president of China Unicom, Michael Treschow, chairman of Ericsson, Carl-Henric Svanberg, president and chief executive officer of Ericsson and Mats Olsson, president of Ericsson Greater China.

While commenting on the deals, Svanberg said, "The new framework agreements announced today further strengthen Ericsson's position as the leading mobile communications supplier in the Chinese market."

"It reflects our vision of providing communications for all, and we are proud to be an integral part of China's economic and social development," Svanberg added.

Earlier this month, Ericsson said that it has been selected by SmarTone-Vodafone in Hong Kong as the only supplier for network enhancements to offer the operator's mobile customers advanced mobile broadband and multimedia services.

Under the three-year agreement, Ericsson will provide SmarTone-Vodafone HSPA-enabled radio access network, which includes Multimedia Broadcast Multicast Service, or MBMS, a functionality that enables mobile-TV services to be broadcast.

Ericsson said on March 26 that its Gigabit Passive Optical Network solution, or GPON solution, has been selected by Grameen CyberNet to provide a fiber-to-the-home, or FTTH, network in Bangladesh.

Ericsson is slated to announce its first-quarter results on April 25.

ERIC closed Friday's trade at $19.80, down $0.21, on a volume of 3.58 million shares. In pre-market trading, the company's shares rose $0.11, or 0.56%, to $19.91.

(Global Financial Newswires)