Nokia and Ericsson Share Japan Telecom Deal
By Cindy Christ

Shares in the world's No. 1 and No. 3 mobile phone companies were trading higher Friday after both landed contracts to help build Japan Telecom's next-generation communications network that will allow users to access the Internet from wireless devices.

Partners Vodafone/AirTouch (VOD) and British Telecommunications (BTY) will work with Japan Telecom to launch the advanced network, known as 3G for third generation, which will start operating in phases in 2000 and 2001.

Finland's Nokia (NOK) said its agreement with the Japanese phone company calls for it to provide radio technology for mobile Internet access, including base stations.

"This is an important breakthrough for Nokia in Japan, with one of the true pioneers in 3rd generation mobile communications," said Jorma Ollila, Nokia chairman and CEO, in a news release.

"It takes us even further towards Nokia's vision of putting the Internet in every pocket in the advanced Japanese market," he added.

Rival Ericsson (ERICY) also won part of the deal and will supply the radio access network and other network components.

"Japan is in the forefront of WCDMA market deployment, as well as being one of Ericsson's most significant markets, and this gives Ericsson an excellent position for future 3G systems worldwide," said Morgan Bengtsson, president of Ericsson of Japan, in a statement.

Separately, Ericsson also announced Friday a $300 million pact with Saudi Telecommunications Co. to expand by a million subscribers STC's existing mobile network in the Kingdom of Saudi Arabia.

Shares in both companies hit new 52-week highs on the news. Nokia finished up $8, or 3.8 percent, at $220. Ericsson added $4.31, or 4.3 percent, to close at $104.81.

Earlier this year, boards of directors of both companies proposed 4-for-1 share splits, which must be approved by stockholders.

Nokia shareowners will vote on the split at a meeting March 22. A date for the split hasn't been set.

Ericsson stockholders will vote March 31 with the stock split expected to occur in May.

In recent months, mobile phone makers have been among Wall Street's best performers, thanks to booming worldwide sales and excitement over the looming convergence of the Internet and wireless communications.

Year to date, shares in Ericsson have risen nearly 55 percent after struggling to keep up with key competitors Nokia and Motorola (MOT).

Over the last 52-weeks, Nokia shares have gained more than 230 percent.