Alcatel-Lucent (NYSE: ALU) has signed framework agreements for 2009 with
China Mobile Ltd. (NYSE: CHL) and
China Telecom Corp. Ltd. (NYSE: CHA) valued at $1.7 billion. (See
AlcaLu Nets $1.7B China Deals.)
The framework agreements are valued at $1 billion and $700 million for China Mobile and China Telecom, respectively, and come just a month after AlcaLu's W-CDMA contract with
China Unicom Ltd. (NYSE: CHU). (See
China Unicom Plans Massive Capex Hike).
AlcaLu's framework agreements include radio and core network equipment, IP service routers, backhaul technology, and application platforms, though the vendor couldn't break down the value of its framework deals by technology.
Framework agreements are commonplace in China and set out a total value for expected business between two companies. Individual contracts are then negotiated within that framework and its terms. This means AlcaLu won't necessarily end 2009 with contracts valued at $1.7 billion: Instead, that figure represents the potential value of the vendor's engagements with the two Chinese carriers during this year.
An Alcatel-Lucent spokesman said the framework agreement for TD-SCDMA with China Mobile relates specifically to AlcaLu's technology, but he reiterated AlcaLu's commitment to its relationship with
Datang Mobile Communications Equipment Co. Ltd. , stating: "When we talk TD-SCDMA, Datang is a critical collaborator."
AlcaLu now has 3G commitments with all three Chinese operators covering all technologies -– TD-SCDMA for China Mobile, CDMA2000 EV-DO for China Telecom, and W-CDMA for Unicom.
This makes it the first non-Chinese vendor to complete the set, as neither
Ericsson AB (Nasdaq: ERIC) nor
Nokia Networks currently supplies China Telecom with 3G-specific equipment, and
Nortel Networks Ltd. is only active with China Telecom.
Motorola Inc. (NYSE: MOT) has engagements with both China Telecom and Unicom. (See
Motorola Wins China Unicom 3G Contract).
It also makes Alcatel-Lucent potentially the strongest international vendor in the Chinese 3G market.
Last month
ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) claimed it tops the 3G vendor table in China, citing research from analyst firm
IHS iSuppli as its source. Rival local vendor
Huawei Technologies Co. Ltd. is believed to be in second place, with Alcatel-Lucent a distant third.
China's three giant carriers are expected to spend more than $29 billion on building out their 3G networks this year alone now that they have their long-awaited licenses. (See
China's 3G Move to Trigger Spending and
China Awards 3G Licenses.)
— Catherine Haslam, Asia Editor,
Light Reading
