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Vendors Bag Chinese Deals

A host of major telecom equipment vendors are set to sign multiple contracts with some of China's leading operators in a Washington ceremony today, with Lucent Technologies and Motorola among the biggest winners, according to newswire reports.

The deals will include fixed line and mobile infrastructure contracts from China Mobile (Hong Kong) Ltd. (NYSE: CHL), China Telecommunications Corp. (NYSE: CHA), and China Unicom Ltd.. The expected beneficiaries are:

  • Motorola Inc. (NYSE: MOT), which is expected to sign multiple deals worth about $1 billion in total. Its share price was up 46 cents, nearly 3 percent, to $16.66 in pre-market trading. Its current 12-month high is $16.26.

  • Lucent Technologies Inc. (NYSE: LU), which is set to ink contracts worth about $350 million. Its share price was up 16 cents, just over 4 percent, to $4.03 in pre-market trading. Its current 12-month high is $3.98.

  • UTStarcom Inc. (Nasdaq: UTSI), which has already benefitted greatly from the Chinese market, is expected to pick up about $200 million worth of additional deals. Its stock was up 48 cents, about 0.5 percent, to $39.38 in pre-market trading.

  • Cisco Systems Inc. (Nasdaq: CSCO) is in line for about $140 million worth of business. Its share price was up by just 4 cents, to $27.07, in pre-market trading.

  • LM Ericsson (Nasdaq: ERICY) and Nortel Networks Corp. (NYSE/Toronto: NT) are also due to win new business. Both firms showed a pre-market increase in their share prices of about 1 percent, with Ericsson's up by 22 cents to $22.92 and Nortel's up 7 cents to $6.39.
The staging of the event, and its location, is regarded by trade analysts as politically motivated -- an attempt to foster better relations between China and the U.S. China recently announced a 2003 trade surplus of $25.5 billion, while the U.S. noted a 2002 trade deficit with China of more than $100 billion, according to a report from Reuters.

The Washington event comes as Chinese vendor Huawei Technologies Co. Ltd. announces bumper 2003 revenues of $3.83 billion, with its international sales nearly doubling to $1.05 billion from $552 million in 2002 (see Huawei Reports Record Revenues).

— Ray Le Maistre, International Editor, Boardwatch

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