Motorola inks $394M in China GSM contracts

By Colleen Taylor, Contributing Editor -- Electronic News, 8/13/2007

Motorola Inc. announced this week it has inked contracts worth $394 million with China Mobile Communications Corp. (CMCC), China's leading telecommunications provider, for GSM network expansion.

The Schaumburg, Ill.-based mobile phone maker said it signed the multiple contracts in the first half of 2007. Approximately 60 percent of the revenue from these contracts was recognized in the first half of 2007, Motorola said.

Pursuant to the contracts, Motorola supplied CMCC with GSM infrastructure equipment in addition to value added services. According to Motorola, the expanded networks are now successfully deployed across 16 provinces and municipalities, including Beijing, Tianjin, Si Chuan, Zhe Jiang, Hunan, Guangdong, Yun Nan, Fu Jian, Hu Bei, Shan Xi, Jilin, Liaoning, Jiang Xi, Anhui, Guizhou and Inner Mongolia. In a statement issued Sunday, Motorola said that the network expansion and services will allow China Mobile to not only grow its subscriber base, but to better manage its network to provide users with high-quality services such as multimedia functionality.

"Today's announcement clearly illustrates Motorola's continued success in the GSM market and its position as one of the leading equipment and services suppliers in China," Ruey-Bin Kao, president of Motorola China, said in a statement. "Our goal is to continue to provide China Mobile with a state-of-the-art GSM network that enlarges its network coverage, maximizes investment and delivers the best services to its customers."

Motorola and China Mobile have worked together for more than 20 years. As of April 2007, China Mobile counted more than 330 million wireless subscribers on its nationwide network.

Recent market research reports have indicated that, due to the Chinese government's prodding, it is not only China Mobile that is updating its networks to keep apace with the leading edge of mobile technology. According to a report issued from iSuppli Corp., the Chinese government is using the granting of 3G licenses to the four state-owned telcos -- China Mobile, China Unicom, China Telecom and China Netcom -- as incentives for the companies to aid in a fundamental restructuring of the nation's telecom industry that will further enable the use of next-generation mobile technology.