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Motorola China pact grows
August 22, 2000: 1:57 p.m. ET

New contracts bring total wireless infrastructure business to $448 million
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NEW YORK (CNNfn) - Motorola Inc. on Monday said it has landed an additional $258 million worth of contracts to expand the wireless communications network of China's second-largest phone company.

The deals mark the second major contract Motorola's network solutions group has entered into with China Unicom in the past month, and brings the total to $448 million.

It also lends further support to the idea that China is favoring the Global System for Mobile Communication, or GSM, wireless communications standard to build out its wireless infrastructure, as opposed to the Code-Division Multiple Access, or CDMA, standard to which Qualcomm Inc. owns the rights.

Earlier this summer, China Unicom scrapped a previous plan to use CDMA, opting instead to wait until a later version that uses wide-band transmission rates, called WCDMA, becomes available.

Some analysts say that could delay the deployment of CDMA technology in China's wireless infrastructure by as much as three years. The GSM standard also is widely used in Europe.

graphicUnder the terms of the deals announced Monday, which partially involve China Eastern Communications Co. and Guangzhou Jinpeng Group, Motorola will expand China Unicom's GSM networks in five of China's major provinces, which together have a population of 200 million.

When the expansion is completed, expected to be by year's end, China Unicom's GSM network capacity will be increased by 3.5 million subscribers, Motorola said.

The Shaumburg, Ill.-based company, which on Monday announced an additional $1.9 billion investment in its Chinese semiconductor and wireless handset manufacturing operations, is the No. 1 system supplier for China Unicom in terms of the system coverage and business volume.

Motorola (MOT: Research, Estimates) shares edged up 5/16 to 36-5/16 in light New York Stock Exchange trade early Tuesday. Qualcomm (QCOM: Research, Estimates) shares fell 1-3/16 to 57-13/16, a 2 percent decline.

Trading volume for both stocks, however, was very light as investors waited for an announcement from the Federal Reserve's policy-making committee regarding interest rates. Back to top


Motorola expands in China - Aug. 21, 2000