The Swedish telecoms equipment group Ericsson has announced deals with China Mobile and China Unicom worth a total of $1.8 billion (Ôé¼1.3 billion).
Ericsson will provide China Mobile, the world's biggest mobile operator, with radio access equipment that will boost the network's capacity and evolve it into an internet protocol, or IP, network. Ericsson said that the new equipment would also help China Mobile to achieve its energy saving goals.
The Stockholm-based company will also supply China MobileÔÇÖs rival and the countryÔÇÖs number two mobile company China Unicom with a faster third-generation network, as well as IP and broadband equipment.
Both contracts will be implemented during 2010.
China is the world's biggest mobile phone market, with more than 700 million mobile users. In the fourth quarter of 2009, the Asian country was Ericsson's second-largest market after the US, making up 10 per cent of its $8 billion total salesÔÇöcompared to eight per cent of total sales a year earlier.
Ninety-nine per cent of ChinaÔÇÖs population has mobile coverage, thanks to operators' recent network expansion to rural areas. However, new additions and increased usage has put pressure on the networks and operatorsÔÇöwho are now investing heavily in maintaining quality and performance levels, especially in larger cities.
Ericsson said in a statement that the Chinese fixed broadband market has also increased rapidly, reaching 103 million subscriptions at the end of 2009.
It added that its potential total customer base in China is approximately 1.3 billion.
Commenting on the deals, Mats H Olsson, head of Ericsson Greater China, said: "The signing of the significant frame agreements is a manifestation of our continued strong cooperation with our Chinese customers.
ÔÇ£We are confident that we will do an even better job in supplying the latest technology and best-in-class services in time to support Chinese operators in fulfilling the demand of this tremendous market growth".
Ericsson is one of SwedenÔÇÖs biggest companies. Its net profit for October to December 2009 was SEK314 million (Ôé¼32 million), compared with SEK3.89 billion (Ôé¼398 million) for the same quarter in 2008.
The company said this was largely due to major restructuring work.
