Motorola Wins 'next Generation' Mobile Contract in China

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Amidst signs that the long-running drama over China's 3G (third-generation) mobile license plans is finally at an end, Motorola announced Tuesday it was awarded a "next-generation" mobile equipment contract with China Telecommunications Group (China Telecom) -- an apparent reference to a deal to provide equipment for the operator's upcoming 3G services.

The Motorola announcement avoided an explicit mention of 3G mobile equipment. Instead, the company said it was chosen by China Telecom to "a key to upgrade a portion of its nationwide network to include next-generation broadband data capability and advanced multimedia services."

The existing equipment that Motorola has been contracted to upgrade is based on CDMA (Code Division Multiple Access) 2000 1X, an older 2.5 mobile data technology that has long been available in China. The next generation of this technology, called CDMA2000 1X EV-DO (Evolution Data Optimized) is a 3G technology that offers faster data connections.

Motorola did not disclose the value of the China Telecom contract, but said it would be a "key" supplier of equipment for the network upgrade, which covers 42 cities in nine Chinese provinces.

"The equipment will be installed in early 2009 and is part of an overall larger project to upgrade China Telecom's entire nationwide CDMA network to next-generation capability," the company said.

That timeframe roughly matches a statement made on Friday by Li Yanzhong, China's minister of industry and information industry. Li said the 3G licenses, which have been delayed for many years, will be issued either this month or in January.

Foreign telecom equipment makers have long waited for China to issue 3G licenses, hoping to win equipment contracts estimated to be worth billions of U.S. dollars. While Chinese equipment makers like Huawei Technologies and ZTE are expected to gain a large portion, if not the majority, of 3G contracts in China, Motorola and other vendors should get a boost from the investment in new networks.

Last week, the China Daily, China's official English-language newspaper, put the value of China's planned investment in 3G networks at 200 billion yuan (US$29.2 billion).

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