Motorola CEO on CDMA, GSM and 3G licenses in China (MOT 2Q05 conf call)

Includes: CHA, CHL, CHU, CN-OLD
by: Ezra Marbach

Motorola (ticker: MOT) reported Q2 2005 results yesterday. Here are key quotes from Chairman and CEO Ed Zander discussing the latest on GSM and CDMA in China and possible reasons behind the reduction in capital spending by telecom operators (from management's earnings results conference call):

On Q2 2005 results

....we held our own in China.

On the networking business and 3G licenses business, once again, Adrian and his team just continue I think to amaze certainly me from where I came in in January '04 hearing about this network business. This has just been an incredible turnaround over the last couple of years. It has had another very strong quarter. Strong performance in North America, which was up 13%. Europe, Middle East, Africa, up 64%, and the growth was offset by a sales decline in Asia driven primarily in China, India and in Southeast Asia. The China sales decline was a result of the reduced capital spend by operators in anticipation of what we think is going to be the 3G license awards, probably later this year, early next year.

On the growth of GSM and CDMA in China

....talking about the GSM technology, we have seen a continuous growth in the marketplace fueled by the continuing growth of GSM in the emerging markets. CDMA for us was a period we had a slight decline from last year, and that was representative of the fact that in previous years we're concluding the large buildouts with CDMA in both China and India. Overall the CDMA market has been very strong....

(Quotes are from the CCBN StreetEvents transcript.)

Comment: China Mobile (ticker: CHL) offers GSM services while China Unicom (ticker: CHU) offers both GSM and CDMA services. You may remember Business Week's explanation for Unicom's CDMA struggles.

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