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