Ericsson Lands $630 Million Contract in China
By Cindy Christ

Swedish cell phone maker Ericsson signed a contract worth more than $630 million to provide an advanced mobile phone system in China.

The GSM network, the largest expansion project in China to date, will serve 18 million subscribers after its completion early next year.

GSM, short for Global System for Mobile Communications, is the wireless communications standard used in digital networks in Europe and Asia.

The agreement with China's Guangdong Mobile Communications Co. Ltd. is part of an effort to develop a new 3G network offering next-generation services, including Internet and data, multimedia, and advanced wireless communications.

Third-Generation, or 3G, is the umbrella term given to a new range of infrastructure and handsets being developed to provide Internet-ready communications services for cellular networks.

These services, which transmit data at high speeds, will become available in some regions of the world starting this year.

Ericsson said the Guangdong system would use its enhanced speech coder technology to improve the transmission quality of women's and children's voices, which have higher frequencies than men's.

Ericsson has been a supplier to Guangdong Mobile Communications since 1987.

"Guangdong province has some of the most advanced telecommunications networks in China," said Stephen Yeung, executive vice president of Ericsson China Co. Ltd. "We are glad that GMCC has shown its confidence and trust in Ericsson as a strategic business partner."

In January, Ericsson's board of directors proposed a 4-for-1 stock split. Shareholders will vote on the proposal at the company's annual meeting on Friday. The split is expected to take effect in May.

Shares in Ericsson closed lower Wednesday, finishing down $7.88, or 8 percent, at $90.13.