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Siemens, Motorola Seek to Scale China's Calls
China's entry into the World Trade Organization will create a more competitive telecommunications environment in China as the country has agreed to allow foreign investment in all types of telecom services, including voice, data, wireline, wireless, Internet and satellite.
China has also agreed to phase out most of the geographic restrictions it currently imposes.
More importantly from an investor's standpoint, it will create great benefits for Motorola and Siemens, two companies that are aggressively pursuing the Chinese telecom market.
Motorola has been busy inking multiple deals in China. In the first week of this month, Motorola's Network Solutions Sector signed a $41 million contract with China Unicom to continue its network expansion using GSM (global system for mobile communications) technology.
Motorola's Network Solutions Sector also signed a $123.5 million contract to expand the digital-cellular network of Hunan Mobile Communication Corporation.
This week Motorola was awarded a $10 million contract by Guangxi Mobile Communications for the deployment of a GSM network. Also this week, Motorola received a $55 million contract from Hubei Mobile Communications Corp. to upgrade its digital cellular network.
Meanwhile German giant Siemens, through its Chinese venture Xin De Telecom, said it would raise more than $2 billion in foreign capital in China over the next five years. North American telecom companies will make the investment, which aims to tap potential opportunities for foreign investors. Motorola's Opportunity
Though China presents both Siemens and Motorola substantial opportunities, implications for Motorola are particularly far reaching.
Once the world leader in cellular phone sales, Motorola has since taken a back seat to Nokia. But with China projected to become the second-largest cell phone market in the world by 2001, Motorola's early market lead in China and a dominant position in Hong Kong's cell phone market will help it make up lost ground.
China is one of the two largest paging markets in the world along with the United States. Although the paging market in the United States is maturing, there exists enormous growth potential in China's market. That's good news for Motorola, which has a solid position in the global paging industry.
China is projected to become the third-largest market for semiconductors in the world, which is also good for Motorola, a semiconductor powerhouse.
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