Ericsson announces increasing 3G stake in China

On the eve of China's issuing 3G licenses, Ericsson tried to keep its No.1 position in China's 3G network construction in the future by increasing its investment here. At the Ericsson Asia Strategy Summit held in Shanghai September 7 Ericsson president Carl-Henric Svanberg and Ericsson China president Mats H Olsson said Ericsson would, on the basis of the investment already made, increase total investment in China by as much as $1 billion in the next five years from 2006 to 2010.

Mats H Olsson said Ericsson made the decision at the meeting of China market board of directors held in Shanghai on September 6 evening. The decision has been approved by Ericsson global president Carl-Henric Svanberg and would be implemented early next year. Apart from increasing investment Ericsson would also keep its R&D investment in China growing at 25 percent a year.

Ericsson is taking up about 35 percent share in China's telecommunications network market and China has become one of its largest markets worldwide. Mats H Olsson said Ericsson expects initial network investment to reach $10 billion to $12 billion once China issues the 3G licenses, while Ericsson's objective is to keep its share. Judging by this, although Ericsson puts in $1 billion it is expected to procure orders worth of $3,5 billion to $4.2 billion and earn as much as $2.5 billion to $3.2 billion.

Ericsson also announced increasing investment in China's domestic 3G standard - TD-SCDMA. Ericsson has reached agreement with Chinese telecom equipment manufacturer ZTE to jointly develop TD-SCDMA. Ericsson has reached cross-license agreement with ZTE whereby either side can get preference in using the other's patented technologies. Meanwhile they would join hands in taking part in the domestic 3G pre-commercial application network trial organized by the Ministry of Information Industry starting this month. Ericsson is negotiating with the Ministry about the charge rate of 3G patents, aiming to attract more companies in the development of 3G with reasonable fees and gain the approval of the Chinese government and supervision authority.

By People's Daily Online