Telecommunications hardware vendors are reaping big bucks out east, signing deals worth more than $2.3 billion with Chinese companies Tuesday.
No. 2 wireless phone maker Motorola Inc. was one of the big winners, scoring two big deals with Chinese companies to the tune of nearly $1.1 billion. One deal, worth about $510 million, was with China Mobile Communication Corp., the largest mobile phone provider in the world. China Mobile is buying Motorola's hardware to improve its GSM/GPRS cellular network, upgrading it to support next-generation data services. Motorola also cut an approximately $556 million deal with China United Telecommunications Corp., also known as China Unicom, to help upgrade networks in Beijing and 12 major provinces.
Other contracts went to Lucent (more than $350 million for a variety of hardware), UTStarcom ($200 million for deployment of its Personal Access System cellular infrastructure equipment), Ericsson ($93 million for its CDMA equipment), Cisco Systems, Intel, and Nortel Networks.
The contracts were disclosed in Washington, D.C., at a ceremony held during the U.S.-China Seminar on Prospects for Cooperation in Telecom and IT.
China is an increasingly important market for telecom hardware vendors, says Sanford Bernstein analyst Paul Sagawa. "It's big and it's growing," he says. "China is probably going to spend in the range of $6 billion on wireless alone this year. ... That's probably around 13% of the entire market."