Alcatel pressing for 3G tie-up with local firm

21 Sep 2004

A senior executive at French equipment manufacturer Alcatel has confirmed that the company is close to inking a deal with an unnamed Chinese counterpart to form a joint venture to build 3G networks utilising China’s new technology standard. ‘We are in very serious talks with local Chinese firms to do something together,’ said Christian Reinaudo, Alcatel’s head of Asia Pacific operations, at a technology summit on Monday. Alcatel is confident that the Chinese government’s much delayed decision on a 3G wireless standard will see TD-SCDMA chosen as the preferred technology for the build-out of the country’s next generation networks, and Reinaudo said it expects the government to announce details on 3G licence awards following the completion of the latest round of trials in November. Alcatel sees 3G as a vital to its success in China; it reported strong growth in the country over the last 18 months and expects to see its market share jump from 12% to 15% this year.

The French vendor has also purchased two US businesses in a bid to strengthen its position in the mobile switching and teleconference sectors. Alcatel will pay USD250 million in shares for Texas-based switching and networking solutions company Spatial Wireless, and USD27 million in cash and shares for teleconferencing specialist Edial in Massachusetts. Additionally, Alcatel is to dispose of its electrical power system operations, selling the business to private equity group Ripplewood for an undisclosed amount.

China, United States