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Fri, Nov 28, 2003 - Page 12 News List

Ericsson says it expects China cellphone permits

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Ericsson AB, the world's largest maker of wireless networks, said it expects China to issue new mobile-phone licenses by the second half of next year, adding that any delay may curb growth for the nation's multibillion-dollar phone-equipment industry.

"China should not wait longer," Jan Malm, Ericsson's China president, said at a briefing in Beijing. "An early launch, at least not late launch, is essential for the local industry."

Equipment suppliers such as Ericsson, Nokia Oyj and Nortel Networks Corp are counting on orders for high-speed mobile networks in China as phone companies slow spending in Europe and North America.

They face competition from domestic makers such as Huawei Technologies Co and ZTE Corp, which are expanding sales in the world's biggest wireless market.

China hasn't announced a timetable for issuing permits as it waits for a homegrown technology to be ready for use.

The government has said it will allow two fixed-line carriers to sell mobile services in competition with the country's mobile duopoly.

Chinese phone companies spent a combined 142 billion yuan (US$17 billion) expanding networks in the first 10 months, government statistics show. Huawei and ZTE, the country's top two domestic phone-equipment makers, had combined sales of more than US$4 billion last year.

Phone companies such as Vodafone Group Plc began cutting purchases in 2001, forcing Stockholm, Sweden-based Ericsson and its competitors to fire hundreds of thousands of workers.

Ericsson, which had 10 straight quarters of losses, has promised to post a profit for next year.

Chief executive Carl-Henric Svanberg, who is in Beijing to brief media on the company's China strategy, said the company is "back to profitability from its operations."

He didn't elaborate.

"We are confident about going forward here," he said.

Ericsson supplies mobile network equipment to China Mobile Communications Corp and China United Telecommunications Corp, the country's two cellphone operators.

Ericsson said it has about 35 percent of China's equipment market based on global system for mobile communications, China's dominant wireless standard.

China is currently testing three technology standards, including a homegrown technology developed by Datang Mobile Communications Equipment Ltd.

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