Two of China’s three main restructured telcos, China Mobile and China Unicom, have signed framework agreements worth CNY 7.6 billion (US$1.1 billion) with Nokia Siemens Networks.

The Finnish-German vendor announced that the agreements with the two Chinese telcos are for 2G and 3G equipment and services for 2009. Nokia Siemens Networks will roll out WCDMA networks in 11 Chinese provinces for China Unicom and provide TD-SCDMA and GSM networks for China Mobile.

The agreements arose from a visit by a China-Europe Purchasing Delegation last week comprising some 200 representatives from Chinese enterprises with the objective of promoting Sino-European ties amidst the global uncertainties.

Following government disclosure that local telcos have US$29 billion expenditure for 2009, industry watchers have been keeping an eye on how even-handed China will be in awarding contracts in view of its rising status in the global economy. The agreement with Nokia Siemens Networks is a demonstration of China’s ability to not just show favouritism to local telecom industry players.

Long Association With China

Zhang Zhiqiang, head of Nokia Siemens Networks'Greater China region, says the recent wins illustrate the company’s experience and relationship with China’s major mobile and fixed line operators.

“We have always played a key role in the development of China’s telecom sector,” he said. “With the country gearing up for the launch of 3G services, we are once again in a competitive position to leverage our experience across both WCDMA and Time Division-Synchronous Code Division Multiple Access (TD-SCDMA) technologies.”

The Finnish-German company has invested in six R&D sites in China which includes the Hangzhou High-Tech Software Park, known for its achievements in advanced mobile communications such as GSM/EDGE, SCDMA/HSPA, LTE, I-HSPA and WiMAX. The company has played a founding role in setting up the Intellectual Property Rights (IPR) of China’s home-grown technology, TD-SCDMA, while pioneering work on the generation technology, TD-LTE.

Besides counting on its experience with 150 WCDMA customers globally, the company can draw upon its first-hand understanding from building up a global R&D, manufacturing and customer services portfolio within China. It is therefore well positioned to help China’s major players launch cost-effective 3G services and expand its services throughout the country.

Both Nokia Corp and Siemens AG are equal partners in this joint venture company which provides employment for 60,000 people. Based in Espoo, Helsinki, the vendor’s success this year follows an earlier US$696 million transaction to expand China Mobile’s network in 2008.

TD-SCDMA Gains =Momentum

By end-2009 China expects to have 10 million TD-SCDMA subscribers as the incumbent telco, China Mobile, launches its 3G services in 38 cities, according to the country’s Vice-Minister of Industry and Information Technology, Lou Qinjian.

At a recent industry forum in Chongqing, Lu Dongfeng, Vice-President of Datang Telecom Technology, the major provider of TD-SCDMA technology and products unveiled projection that China aims to have 100 million users of the home-grown technology by 2011.