MUNICH—Siemens AG is the latest in a series of vendors to announce new contracts in China, signs that the country continues to stand as a major opportunity for infrastructure makers. Siemens announced two deals with mobile operators for GSM equipment and an order for GSM-Railway network equipment.
Siemens said it inked a network expansion deal for $115.6 million with China Mobile Communications Corporate Ltd., China’s largest carrier with more than 246 million subscribers. The company also scored a $64.2 million contract for GSM equipment with China United Communications Corporate Ltd., the nation’s second-largest carrier with more than 127 million subscribers.
In addition, Siemens said it won an order worth “double-digit millions of euros” from the Chinese Ministry of Railways to build a GSM-R wireless network on the 71-mile high-speed passenger rail system to be built between Beijing and Tianjin. GSM-R network technology supports the demands of voice and data communications in trains.
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China’s MOR also awarded a contract to Nortel Networks Ltd. recently to provide GSM-R switching centers for digital mobile signaling and operational communications spanning 20 of China’s 31 provinces and covering nearly half of China’s national railway footprint.
And Nokia announced last week that it won a Chinese contract to expand Sichuan Unicom’s GSM footprint in western China by supplying its radio and core networks, including its MSC Server System mobile softswitch in four cities within the Sichuan province. Sichuan Unicom is a subsidiary of China Unicom.
The infrastructure agreements underscore vendors’ market positions as they wait anxiously for the Chinese government to award its highly coveted third-generation licenses later this year. The awards will enable vendors to supply network gear for what is expected to be the world’s largest 3G network, serving some 400 million Chinese subscribers.
“3G licenses will soon be awarded in China, which is why we’re all the more pleased about the confidence these two operators have in our technology,” noted Christoph Caselitz, president of Mobile Networks at Siemens. “This cost-efficient expansion will optimally ready the networks of China Mobile and China Unicom for the migration to third-generation wireless and also strengthens our starting position for the award of 3G licenses.”
The contracts also shed light on China’s apparent commitment to the GSM suite of wireless infrastructure, which some in the industry had questioned since the Chinese government has consistently encouraged the development of TD-SCDMA, a homegrown 3G technology that promises to become at least part of China’s 3G network buildout. Though they have been largely left out of China’s GSM network plans, Chinese suppliers ZTE Corp. and Huawei Technologies Co. Ltd. could dominate the country’s TD-SCDMA landscape.
However, Siemens points out in a press release that its “pioneering role in connection with TD-SCDMA” places the company in a sweet spot, ready to rake in revenues from the Chinese wireless market regardless of which technology the government pushes.
