When Figures Don't Match

When China Unicom Ltd. opens its capex box, it's always for big-time bucks. Its CDMA "Phase One" buildout saw it shell out about $2.3 billion on infrastructure. Now it has signed "framework" agreements for "Phase Two" (or "Phase II: Return of the Truck Roll" in our tiny minds).

The lucky recipients of the carrier's largesse are Ericsson AB (Nasdaq: ERICY), Lucent Technologies Inc. (NYSE: LU), Motorola Inc. (NYSE: MOT), and Nortel Networks Corp. (NYSE/Toronto: NT). Three of the vendors were quick off the mark to tell the world how much the deals were worth, Lucent being the exception (see Ericsson Signs With Unicom, Lucent Wins at Unicom, Moto Gets a Piece of Unicom, Nortel Boosts China Unicom, and China Unicom Doles Out Deals).

To Unstrung's delight, China Unicom stumped up some valuations. And guess what? Well, we thought this would make an interesting table:

Table 1: Unicom CDMA Awards: YOU SAY HOW MUCH?????
Vendor Vendor's valuation of its share of deal Unicom valuation of vendor's share of deal Difference in valuations Unstrung says
Ericsson More than $150 million $155.8 million (RMB 1.288 billion) Dang near spot on Fair play
Lucent Did not offer valuation $428.3 million (RMB 3.54 billion) NA (boring) Shy or wise? You, the jury, decides
Motorola $446 million $350.8 million (RMB 2.9 billion) Overshot by $95.2 million Outrageous overclaim - punishment required
Nortel $280 million $254 million (RMB 2.1 billion) Overshot by $26 million Sin bin for 'too creative' Nortel
Exchange rate used: RMB 1 = $0.12
Source: vendor press releases and Unicom press release, so there's no getting out of it!

The evidence is damning, we're sure you'll agree. Maybe Motorola thought it had Lucent's deal. Tsk tsk. And these are framework agreements too, where there are no absolute guarantees of firm purchase orders to the full amounts.

What the figures don't show is how much margin there is in this business for the vendors. In the current "buyer's market," it may be slim. But, of course, well worth having on the table.

— Ray Le Maistre, European Editor, Unstrung
olematon 12/4/2012 | 9:30:16 PM
re: When Figures Don't Match According to the press release at http://www.chinaunicom.com.hk/...
the numbers are: "The total contract value was over RMB 10.271 billion, of which, the contract for Motorola was valued at RMB 3.689 billion, Lucent at RMB 3.371 billion, Nortel at RMB 2.282 billion and Ericsson at RMB 929 million. "
spc_rayella 12/4/2012 | 9:29:58 PM
re: When Figures Don't Match Unicom has altered its own release. My figures came from the same release at the same location, and which now appears on our site at
So now Unicom has some explaining to do....
Very Unstrung Ray
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