Alcatel Ups 3G Investments in China

Telecom equipment giant Alcatel has invested $32 million in
Chinese mobile specialist Datang Mobile, the companies announced today.

The backing flows through Alcatel subsidiary Alcatel Shanghai Bell and is
aimed at accelerating development and implementation of systems based on
Time Division-Synchronous Code Division Multiple Access (TD-SCDMA)
specifications. TD-SCDMA is a third-generation standard
developed in China.

The companies will form a team to focus on building TD-SCDMA products from
Alcatel’s manufacturing base in Shanghai. The first products are expected
to be delivered to the Chinese market by June 2005. A spokesperson for
Paris-based Alcatel was not immediately available for comment.

In a statement, Gerard Dega, president of Alcatel Shanghai Bell, said, “We
are proud of playing a part in fostering the development of China’s
home-grown 3G standards. With a strong partner like Datang Mobile, we will
be able to offer Alcatel’s customers a complete range of 3G mobile
infrastructure solutions, regardless of the standard they adopt.”

In addition to the investment and partnership with Datang, Alcatel said it
recently began TD-SCDMA interoperability testing with the China Ministry of
Information Industry.

Alcatel is no stranger to the Chinese market. Last year, it invested $145
million as part of a plan to position itself for 3G-based mobile
communications network contracts. Alcatel currently provides about 10
percent of the mobile telecommunications equipment for its current 2G
networks.

In 2002, Alcatel set up a merger with a local Chinese company and formally
created Alcatel Shanghai Bell. The joint venture currently has 6,500
employees, a manufacturing center and a sales and support center.

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