Ericsson To Supply Small Part Of China Mobile 3G Trial

STOCKHOLM -(Dow Jones)- Swedish telecommunications equipment maker, Ericsson Wednesday said it has been awarded a contract to supply a small part of the network equipment for China Mobile's trial of third-generation mobile telephony.

China Mobile has decided to use domestically developed TD-S CDMA as its 3G technology.

Ericsson is the only non-Chinese vendor to take part in the rollout, but its share only accounts for 1.4% of the total contract reportedly worth around CNY26.7 billion.

"Nobody expects the TD-S CDMA technology to play a significant role in the future, not even the Chinese operators," Ericsson's Chief Executive Carl-Henric Svanberg said ahead of the company's annual general meeting.

Ericsson reiterated its 2007 outlook and said the value of its deal to manage part of Vodafone's European networks is around 4 billion kronor ($580 million).

Vodafone Tuesday said Ericsson will manage the supply and distribution of spare parts to countries including Germany, Spain and Portugal, as part of its initiative to cut overheads in Europe.

Ericsson said in February that it sees the market for mobile infrastructure built on GSM and third-generation WCDMA technology growing around 5% this year compared to 2006, with the market for network-related services growing around 10%.

In addition, Ericsson said it will continue to take market share as its key rivals Nokia Siemens Networks, a joint venture of Nokia and Siemens, and Alcatel-Lucent work to integrate their operations after recent mergers.

Svanberg said Ericsson's outlook hasn't been changed.

"For us its full speed ahead," he said. He declined to provide details, but said the company would provide an update April 27, when it reports first-quarter earnings.

Nokia Siemens Networks, which began operations in early April, last week warned that it expects "very slight" market growth this year - thus downgrading earlier estimates by the two companies that formed the joint venture. There are indications spending is slowing in some regions, Nokia Siemens Networks said.

-By Magnus Hansson, Dow Jones Newswires; +46 8 545 130 91, magnus.hansson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 11th April 2007