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Ericsson's chief executive officer Carl-Henric Svanberg said the company expected China to hand out four licenses for faster wireless services this year and to hold on to its market share in the country.
"The way we read it they are very much back into rolling out four licenses" for so-called third-generation, or 3G, wireless services, Svanberg said. Ericsson, the world's largest maker of mobile-phone networks, had "a good chance of defending'' its 35 percent market share in China, he said.
China will decide how many licenses and which 3G standards to use. Ericsson, along with Finland's Nokia Oyj, belongs to a group promoting one 3G standard, while a group led by Germany's Siemens AG and Beijing-based Datang Mobile Communications Equipment Ltd., a government-owned phone equipment maker, is promoting another. The groups have agreed to cooperate to make their systems compatible and help speed up China's decision.
"There is a lot of interest in this because it's probably the next wave of big contracts in this industry and we're talking about some very large contracts,'' said Bertrand Bidaud, a telecommunications analyst at Gartner in Singapore. "In terms of subscribers, the Chinese market is the world's largest.''
The GSM Association, where Ericsson is a member, is offering the 3GSM standard using global system for mobile communications, or GSM, technology and WCDMA, or wideband code division multiple access. The competing TD-SCDMA Forum group is developing its own standard for 3G called division synchronous code division multiple access. Such faster services allow phone users to download music or hold video calls.
Svanberg said he was "sure" Chinese competitors would get 20 percent of the network gear market in the world's most populous nation. Ericsson's relationship with China stretches back to the 1890s, when it installed a telephone exchange in Shanghai.
Ericsson reported fourth-quarter net income of 6 billion kronor (US$877 million), the highest since 2000. Increased demand and cost cuts had allowed Ericsson to return to profit in the final quarter of 2003.
(Shenzhen Daily March 10, 2005)
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