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Nortel's Ties With China Continue

Nortel Networks continue to strengthen its ties to China, announcing Friday a contract to provide voice over IP (VOIP) equipment to China Telecommunications Corp.

Nortel, in the middle of merger talks with wireless phone maker Motorola Inc. , continues to make progress in closing wireline and wireless deals around the world.

Nortel already has packet-handling technology installed at British Telecom Spain, ish (in Germany), Sprint and Qwest Communications .

Friday's contract, for an amount Nortel officials declined to elaborate on, puts softswitches, interactive media servers and other next-generation equipment in central offices throughout Beijing, Shanghai, Guangzhou and Shenzhen for field trials. The equipment will service both wireless and land-based packets.

Robert Mao, Nortel Networks China president and chief executive officer, said the deal is a chance to prove the technology's worth to Chinese telecoms.

"Nortel Networks is committed to working with China Telecom and other Chinese carriers to transform their existing, separate networks into single, cost-effective converged infrastructures, creating reliable platforms for future, feature-rich, revenue-generating services," he said.

China Telecom is a good place to start convincing Chinese carriers to invest in Nortel equipment: in addition to 179 million telephone users and 32 million Internet users, the carrier is also the official company serving the government of the People's Republic of China.

Nortel's good fortune in China began last July, when China Telecom subsidiary Guangdong Telecom signed on the equipment maker to supply its network backbone with OPTera switches.

The deal had an estimated worth of $10 million and obviously pleased the subsidiary's owners, for they signed Nortel to a subsequent $18 million deal in September 2001, this time to power up the 2008 Olympic Games in Beijing and selected provinces throughout China.

Three months later, Nortel signed a $15 million contract with China Mobile, putting equipment to support its nationwide backbone.