Ericsson and China Mobile Communications signed a $1 billion wireless networking equipment deal on Sunday, during a visit by Chinese president Hu Jintao -- the first state visit to Sweden ever by a Chinese president. Ericsson will supply core and radio network equipment and technical support/services. China Mobile plans to expand its GSM coverage in 19 regions within China. Deliveries of equipment have already started. Shares of Ericsson were up nearly 1% in morning trading in Stockholm. Its ADRs gained 1.2% to $37.14 Friday. Shares of China Mobile rose 0.76% in Hong Kong. Its ADRs gained 2.4% to $46.85 Friday. Ericsson CEO Carl-Henric Svanberg told reporters the company has a third of the telecom market in China. In a statement, Ericsson said it sourced up to $2.5b in China in '06 and exported $1.6b worth of products. In a separate deal, Sony Ericsson and China Postel Mobile Comm. announced a $600m mobile phone purchasing agreement.
Sources: Press release, MarketWatch, Reuters
Commentary: Ericsson Execs Discuss 2G, 3G in China • Global Handset Sales Gain 14% Year/Year • Sony Ericsson to Target Lower-end Cell Phone Segment
Stocks/ETFs to watch: Ericsson (NASDAQ:ERIC), China Mobile (NYSE:CHL), Sony (NYSE:SNE). Competitors: China Unicom (NYSE:CHU), Motorola (MOT), Nokia (NYSE:NOK). ETFs: iShares MSCI Sweden Index (NYSEARCA:EWD), Wireless HOLDRS (NYSEARCA:WMH), iShares FTSE/Xinhua China 25 Index (NYSEARCA:FXI), PowerShares Gldn Dragon Halter USX China (NYSEARCA:PGJ)
Conference call transcripts: LM Ericsson Q1 2007, Sony F4Q06
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