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Ericsson Boasts Major China Deals

Ray Le Maistre
LR Mobile News Analysis
Ray Le Maistre, Editor-in-Chief

Ericsson AB (Nasdaq: ERIC) says it has signed framework agreements with two of China's main carriers that, if fulfilled, will be worth US$1.8 billion.

The vendor says it's supplying China Mobile Ltd. (NYSE: CHL) with mobile softswitching equipment and its RBS 6000 multi-standard base station that can handle 2G, 3G, and proto-4G connections. For China Mobile, that means supporting GSM and GPRS for 2G, TD-SCDMA for 3G, and TD-LTE for proto-4G. (See China Pumps $15B Into 3G, China Mobile Fast-Tracks TD-LTE , and LTE Base Station Strategies.)

That deal, which is set to be "implemented this year," will be worth $1 billion if the carrier purchases everything set out in the framework agreement. China Mobile, which has more than 527 million mobile customers, recently announced that it has cut its capex budget for 2010 to $18 billion. (See China Mobile Crunches Its Capex.)

The vendor struck a similar framework deal with China Mobile in 2009. (See Ericsson Inks $1.7B Chinese Framework Deal.)

The deal with China Unicom Ltd. (NYSE: CHU) is much more wide-ranging. Ericsson is supplying HSPA equipment to support the carrier's WCDMA-based 3G rollout, plus IP routers, GPON access equipment, 40-Gbit/s optical transport gear, and IMS (IP Multimedia Subsystem) elements.

Again, the deployment is set to happen this year, and will be worth $800 million to the vendor if the full terms of the framework agreement are met.

Ericsson's 2009 framework deal with Unicom was worth $700 million. (See Ericsson Inks $1.7B Chinese Framework Deal.)

Unicom ended 2009 with 145 million mobile customers, of which 2.7 million were 3G subscribers. (See China Unicom Reports 2009.)

— Ray Le Maistre, International Managing Editor, Light Reading

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