Vendors Bag Monster 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

truelight 12/5/2012 | 2:42:00 AM
re: Vendors Bag Monster Chinese Deals Political payment for not hassling China.

$2B in payment for USA today is worth $200B payback to China tomorrow.

pnni-1 12/5/2012 | 2:42:00 AM
re: Vendors Bag Monster Chinese Deals That is nice of China/Vendors to hold a ceremony in Washington, DC. I wonder if they gave the catering bids to all the laid off workers? Don't eat the bon bons:) Just a little vent.
pnni-1 or is it iisp
whyiswhy 12/5/2012 | 2:41:45 AM
re: Vendors Bag Monster Chinese Deals Tidbit for not changing exchange rates nor imposing tarriffs. Nothing is scheduled to happen until 2006 (WTO), even then it's all talk anyway. Have to see some need for US goods over there...like food or oil. The oil is coming (car sales up). And food...well, the birth rate is going up again.

Segway: Someone told me the minimum wage in the Philippines is 250 Peso per day. That works out to about 31 Pesos/hour. The US minumum wage is about $5.15 per hour. That means the exchange rate should be something like 6.06 Pesos/US dollar.

The actual exchange rate is about 55 Pesos/US dollar. Roughly 9:1 off what it should be.

I am sure similar numbers exist for China, but might have to be developed from average salaries of laborers and engineers...amalgamated.

If anyone knows the figures, a post would be appreciated.

tohaveandhavenot37 12/5/2012 | 2:40:42 AM
re: Vendors Bag Monster Chinese Deals If the following report on Business Times Singapore is correct, then the majority, if not all, of the equipment ordered from Motorola and Lucent will be manufactured in China. In LucentGÇÖs case, the report said GÇ£the majority of its US$350 million contract with China Unicom and China Telecom ..... was part of an existing deal first announced in September 2003.GÇ¥ The deal in question could be the China wireless contract Lucent announced on 9/25/03. (See GÇ£Lucent Technologies wins China Unicom expansion contracts valued at more than $230 millionGÇ¥, Link: http://lucent.com/press/0903/0... ). It looks like China just transfers her money from left pocket to right pocket, and gets good publicity. What a bloody sweet deal!!!



Published January 15, 2004 by Business Times Singapore

Equipment in US$1.1b China deal to be made in mainland

(BEIJING) Some US$1.1 billion of telecoms equipment bought amid fanfare by a high-profile Chinese purchasing group in Washington will largely be made by China-based factories, officials said yesterday.

According to the agreements, Motorola Inc will supply telecoms equipment to China Mobile and China Unicom, but most of the products will be made in China, said Kerry Strong, a general manager at Motorola (China) Electronics Ltd.

Motorola announced on Tuesday in Washington that it had won contracts worth US$556 million with China Unicom and US$510 million with China Mobile, to expand their mobile networks and upgrade data services.

US Commerce Secretary Donald Evans, who witnessed the signings, described the deals as 'a monumental event'. It was Mr Evans who late last year in Beijing urged China to make efforts to level an expected US$130 billion trading surplus with the United States.

But with most of the products made in China and sold to mainland-based companies, the deals were unlikely to make much of a dent in the surplus which rose from US$102 billion in 2002.

The Motorola deals were part of a total US$2.3 billion of telecoms contracts announced by the Chinese purchasing delegation and which also involved Lucent Technologies Inc and UTStarcom Inc.

'We have a telecom equipment manufacturing base in Tianjin (China), so most of the products will be made there,' Mr Strong told reporters at a briefing.

'Only a very small amount of the equipment, mainly servers, will be bought abroad,' he said, without disclosing the value of the imports.

China Mobile, the mainland's largest mobile carrier, is purchasing the equipment to expand its capacity in Beijing and 13 provinces, a project scheduled to be completed by the end of this year.

It will enable the carrier to increase its subscriber capacity by another 10.5 million customers this year, Mr Strong said.

A Lucent source meanwhile said the majority of its US$350 million contract with China Unicom and China Telecom also announced in Washington on Tuesday was part of an existing deal first announced in September 2003.

Most of the equipment covered in the deal - which will see Lucent provide further support for the phase three expansion of China Unicom's CDMA2000 mobile network - will also be made in China at Lucent joint ventures and shipped for use on the mainland 'over a period of months'.

The equipment will be entirely manufactured at Lucent's Asian manufacturing centre in the eastern city of Qingdao, a joint venture in which Lucent holds a 51 per cent stake, an official at the Qingdao joint venture said. - AFP
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