NEWS Chinese telephone service providers have awarded contracts worth more than $1.4bn to US network equipment companies, meaning a big payday for Lucent Technologies and Motorola.
The biggest spender was China Unicom, one of the largest communications companies in the world. As part of plans to upgrade and expand the reach of its mobile phone network, it signed a $556m equipment supply deal with Motorola's Global Telecom Solutions Sector and placed an order worth an undisclosed amount with Lucent. The Chinese carrier also awarded a separate contract to Lucent and Juniper Networks for gear to expand and improve its wireline network.
Motorola's beleaguered telecommunications network equipment division emerged as a big winner in contract announcements, made by Chinese carriers on Tuesday. In addition to the China Unicom deal, the company received a $510m order for cellular network gear from China Mobile, the world's largest mobile phone service provider by user numbers, which is expanding its GSM network.
The last few years have not been kind to US telephone network equipment providers, which were already taking hits from a hypercompetitive market and a shrinkage in orders when the overall economy began to droop in the late 1990s. However, the Chinese orders are the latest indication that telephone network operators are ready to increase their spending. In December, for example, Cisco Systems CEO John Chambers gave an upbeat assessment of IT spending. In addition, Verizon Communications recently announced that it will spend $3bn on network improvements in the next two years.
Lucent Technologies won a total of $350m in contracts from China Unicom and China Telecom, the company said. Further financial terms of the deals were not provided. Cisco Systems has also agreed to supply network equipment to the two carriers, said a company representative, who declined to disclose financial details.
In addition, China Unicom ordered $93m in network gear from Ericsson, according to the Swedish company.
Ben Charny writes for CNET News.com.
