Ericsson has signed a frame agreement with China's biggest mobile operators China Mobile and China Unicom. China Mobile will receive a radio access network from Ericsson, which includes a radio base station and mobile soft-switching tech. The equipment will add capacity to the existing network and allow more subscribers to use data services over their mobile handsets.
The Swedish maker of telecommunications equipment is also going to ship hardware to China Unicom. HSPA Evolution infrastructure will be sent to the Middle Kingdom's other large mobile operator, as well as IP routers, wave-division multiplexers for fibre optic networks and an IP multimedia subsystem.
According to Ericsson, the two framework contracts are worth 1.8 billion US dollars in total. China Mobile will pay 1 billion US dollars, China Unicom 800 million US dollars.
Ericsson states 747 million subscribers use mobile services in China. Last year, mobile operators won 106 million new subscribers, bringing the penetration rate to 56.3%, which leaves plenty of space for growth as the market is not yet saturated.
Broadband subscribers are also on the rise, around 103 million people had a DSL line end of 2009. Around 99% of the Chinese population has mobile coverage, yet capacity has to be added to make sure customers can use 2G and 3G data services, which need a lot more of capacity.