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Nortel Opens 3G Talks in China

Nortel is close to establishing a joint venture with China Putian to build third-generation wireless gear for the Chinese market, the company said today.

The new company will handle R&D, manufacturing and sales to carriers in the promising China market. China Putian will own 51 percent of the joint venture, and Nortel will own the remaining 49 percent.

In a statement, Nortel CEO Bill Owens said the collaboration will help the company advance 3G technology and strengthen its ability to reach new prospects in China.

Nortel spokesperson Jay Barta said Nortel has formed three joint ventures with Chinese firms to date.

Nortel, which has been dogged by an accounting scandal, has had recent success in 3G in the United States, helping support major rollouts by Verizon Wireless and Cingular.

The move to strengthen ties with China is not altogether unexpected. In a September meeting with reporters, Owens said the company was exploring its options with large players in the Asian market.

"We see these companies competing with us in the Western world ... in places that I would not expect them to be yet," Owens said at the time, citing Huawei Technologies and others.

The two companies have collaborated on projects before, including 3G field trials sponsored by China's Ministry of Information Industry. Details of the joint venture are expected to be finalized by June 30.

Other large North American networking companies have also taken notice. At Cisco's annual shareholder meeting in November, CEO John Chambers predicted that the majority of the company's competitors a decade from now will be Asia-based.

Industry watchers attribute the rise of Asian companies to the improved IT infrastructure, low cost of production, solid education systems and softening economic and regulatory policies.



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