Notel expands Chinese Presence

Notel is significantly expanding their presents in China, embarking $200 million over the next three years. The canidian’s largest telecom equipment maker sees China as the most important market and a source for technology talent.
according to ottawa business journal’s report.

Nortel expands Chinese presence
By Ottawa Business Journal Staff
Tue, Sep 16, 2003 8:00 AM EST
Frank Dunn at Nortel’s AGM in April

Canada’s Nortel Networks on Tuesday became the latest telecom equipment maker to announce grand new plans for research and development in China, earmarking US$200 million over the next three years.

The Brampton, Ont.-based company said it plans to have doubled its R&D staff in China by the end of the year. It will construct a new, 55,000-square-metre campus in Beijing’s Chao Yang District. The first phase, which will be 27,000 square metres in size, is scheduled for completion by late 2004.

“China is extremely important to Nortel Networks, both as a market and as a source for technology talent,” Nortel chief executive Frank Dunn said in a statement. “With our ongoing emphasis on R&D in China, we are strengthening our presence here to drive the most advanced customer network transformations on a timely basis.”

Nortel already has R&D facilities in Beijing and the southern city of Guangdong.

A number of industry heavyweights have announced in recent months that they will ramp up operations in China to position themselves in what is emerging as the largest market for wireless networks in the world. Aside from the market opportunity in China itself, the country has a reputation for quality engineering talent at bargain rates.

In August, French firm Alcatel SA announced a US$145-million investment, while Japan’s NTT DoCoMo Inc. pledged $5.3 million. In June, New Jersey-based Lucent said it would spend $50 million on a research centre in China to develop third-generation wireless technology.

In all, China has attracted about US$37 billion in actual foreign investment in the first eight months of this year, up more than 18 per cent from the same period of 2002, according to Reuters.

China is the world’s largest wireless market by number of subscribers. As of the end of July, there were an estimated 240 million mobile phone users in the country.

Nortel is already in the third phase of a US$139-million contract for a mobile phone network with China Unicom. By the end of the year Nortel will have completed a network with capacity for six million users in the city of Chongqing and the provinces of Zhejiang, Shandong and Heilongjiang.

Also early Tuesday, a French newspaper reported that Nortel had won a third-generation mobile network deal with French telecom services provider Orange. The contract was said to be worth up to US$1.13 billion. However, neither company would confirm the report and the newspaper did not cite any sources.

Separately, Reuters quoted anonymous sources as saying that Alcatel, Nortel and Finnish wireless giant Nokia had won a joint contract for third-generation wirless networks with Orange. However, details remain sketchy and only Alcatel has acknowledged any new deal with Orange.

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