Summit News

Ericsson targets new China Mobile deals

SHANGHAI (Reuters) - Ericsson ERICb.ST, the world's largest maker of mobile networking gear, said it aims to maintain its market share in a new round of 3G contracts being tendered by China Mobile 0941.HK, the world's largest mobile carrier.

Johan Wibergh, Ericsson's senior vice-president and head of networks, speaks during an interview at the Sweden pavilion at the Shanghai World Expo site May 17, 2010. REUTERS/Stringer

China Mobile, which has more than 500 million subscribers, had started a highly anticipated request for proposals in the third round of bidding for its third-generation (3G) mobile network based on a homegrown standard known as TD-SCDMA, said Johan Wibergh, senior vice-president and head of networks.

“For China Mobile and 3G we have around 5-10 percent, and it will surprise me if we have significantly more” in the new round of contracts, he said on Monday at the Reuters Technology Summit in Shanghai. “Of course we aim to have more but that’s what we have today.”

China’s three main telecoms operators spent about $21 billion last year building 3G mobile networks, following the much-delayed awarding of licenses.

China's dominant carrier China Mobile, which had to build its 3G network from scratch, was the largest of the spenders, awarding the bulk of its two rounds of TD-SCDMA contracts last year to local players Huawei Technologies HWT.UL and ZTE Corp 0763.HK000063.SZ.

In March, Ericsson said it had secured $1.8 billion in deals with Chinese operators, including a $1 billion deal with China Mobile.

China has had limited success exporting TD-SCDMA, largely because of the technology’s untested nature and lack of networking equipment and cell phones available to support the standard.

But Ericsson is seeing interest start to sprout up in TD-SCDMA’s fourth-generation (4G) successor, known as TD-LTE, which China Mobile is already trialing in Shanghai and which is closer to other globally accepted standards.

Wibergh said Ericsson had been seeing interest in TD-LTE from the United States, Europe and India, although in the United States that has been limited to more “general discussion.”

“On TD-LTE, there have been no procurements yet but we are working really hard because we want to be a leader in that also,” he said. “And it is very important to us.”

On a more global basis, he said the upcoming roll-out of smartphones based on Google's GOOG.O open-source Android operating system could give a strong boost to wireless equipment suppliers, as the cheaper phones optimized for data applications start to boost demand for network capacity.

“In the coming five years, $300 billion in revenue for operators will be created around mobile data ... which means that generates opportunity for us to sell out equipment to operators to increase total coverage and capacity,” he said.