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Alcatel lands China wireless deal

The telecommunications equipment maker announces a $180 million deal that extends its relationship with Jiangsu Mobile Communication of China.

Telecommunications equipment maker Alcatel announced a $180 million deal Thursday that extends its relationship with Jiangsu Mobile Communication of China.

France's Alcatel will supply equipment for Jiangsu Mobile's GSM (Global System for Mobile Communications) network and help upgrade the company's systems to move data faster over wireless networks. The two companies also signed a joint research and development, training, and market development pact.

The deal is part of a growing international effort to cash in on China's potentially huge mobile communications market. Statistics put China's total mobile phone subscribers at 70 million by the end of September 2000, with a penetration rate of just 4.5 percent of the population.

"The addressable market for telecom services in China is about 350 million people, mostly concentrated on the coast," said Tony Carmona, an analyst at Information Gatekeepers Group.

Carmona says the challenge for China and U.S. companies is to serve the larger and poorer rural population located inland, and upgrading the county's information technology is a top priority.

"They know that to be a developed country, they need to invest in their telecom infrastructure," he said.

Alcatel installed Jiangsu Mobile's first GSM network in 1994 and has helped the company expand its network five times through its joint venture with Shanghai Bell Alcatel Mobile Communications, one of 16 joint venture agreements that Alcatel maintains in China.

Alcatel is one of several wireless technology providers, including Qualcomm, Ericsson and Nokia, vying for wireless business in China.