Sweden’s Ericsson Telephone Co., the world’s largest wireless network firm has signed a $1 billion GSM expansion framework agreement with China Mobile Communication Corp. According to the new framework agreement, Ericsson will supply core and radio network equipment, together with related technical support and services, to expand China Mobile’s GSM coverage in 19 regions of China. The latest expansion project will allow China Mobile to enhance network capacity and functioning, at the same time generating new revenue avenues from it’s hundreds of millions of its subscribers.
Additionally, Sony Ericsson, a joint venture forged in 2001 by Japan’s Sony and Ericsson, said it had also inked a deal valued at 600 million dollars to provide mobile phones to China Postel Mobile Communications Equipment, a holding of China National Postal and Telecommunications Appliances Corporation. On the other hand, Sony Ericsson had recently revealed that it signed a memorandum of understanding with the Shenzhen Telling Communications Corporation for mobile phone purchasing valued at more than 500 million dollars. Shenzhen has grown into one of the biggest and most influential telecom distributors in China. It is a national distributor of Sony Ericsson and other mobile phone manufacturers.
The agreement was signed at a function in Stockholm attended by Chinese President Hu Jintao and Swedish Prime Minister Fredrik Reinfeldt. Hu Jintao was on a three-day state visit to the Scandinavian country. Speaking over the agreement, Ericsson Chief Executive Carl-Henric Svanberg said, ‘Ericsson is proud of its cooperation with China, which dates back over a century. We are dedicated to supporting the development and growth of China’s telecom industry with our global expertise and proven competence. The agreement we are announcing today is further proof of this’.
However, the firm has already captured a third of the telecom market in China, therefore the agreement was another significant move in the strengthening and expansion of the company. The expansion project will strengthen Ericsson’s position as the leading mobile communications supplier in the Chinese market. Ericsson’s participation with the Chinese telecom industry started in 1892 when Ericsson received its first order from China. In 1894, around 2000 Ericsson telephone sets were given across the oceans to Shanghai, signaling the start of Ericsson’s role as China’s telecom provider.
