Frame agreements with China Mobile and China Unicom, valued at USD 1.8 billion Tweet

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Network expansion to speed up the fastest-growing economy
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Better quality and performance to boost 56.3 percent penetration rate
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Faster 3G network and boosted network capacity for millions of tech-savvy Chinese

With a potential customer base of 1.3 billion, telecom operators are now taking steps to further expand and boost China's communication infrastructure and related services. China Mobile and China Unicom today signed 2G/3G frame agreements with Ericsson (NASDAQ: ERIC).

Living in the fastest-growing major economy in the world for the past 30 years, the Chinese have developed increasing technological needs. A steadily rising number of the Chinese population is going mobile. In 2009, there was an additional 106 million new mobile subscriptions, bringing it to a total of a 747 million. With a penetration rate of 56.3 percent, there are no signs of the market cooling down. The fixed broadband market also shows strong growth of about 20%, bringing it to a total of 103 million subscriptions at the end of 2009.

Today, 99 percent of the population has mobile coverage, thanks to operators' recent network expansion to rural areas. However, new additions and increased usage, especially with non-voice services, has put pressure on the networks and operators. Because of this, the operators are investing in maintaining quality and performance levels, especially in larger cities.

Mats H Olsson, Head of Ericsson Greater China, says: "The signing of the significant frame agreements is a manifestation of our continued strong cooperation with our Chinese customers. We are confident that we will do an even better job in supplying the latest technology and best-in-class services in time to support Chinese operators in fulfilling the demand of this tremendous market growth".

Under the agreement with China Mobile, Ericsson will provide a radio access network including a multi-standard radio base station RBS 6000 and mobile soft-switching technology, which will drastically boost the capacity of the network and evolve it into an IP network. With such solutions, Ericsson will also help China Mobile to achieve their energy saving goals. The framework contract is worth USD 1 billion and will be implemented during 2010.

In the agreement with China Unicom, Ericsson will provide a faster 3G network with HSPA Evolution technology to secure higher speed and better user experience for consumers. In addition, Ericsson will further expand cooperation with China Unicom in the area of IP and broadband, supplying IP routers, fiber access technologies GPON and 40G WDM as well as IP multimedia subsystem (IMS). The framework contract is worth USD 800 million and will also be implemented during 2010.

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