Motorola has won a contract to upgrade China Telecom's next generation mobile networks, a prelude to the country's imminent 3G services, the US-based telecommunications giant said yesterday without stating a price.

Motorola will provide CDMA (code division multiple access) infrastructure in 42 Chinese cities, to be installed in early next year, it said.

The company will also provide China Telecom with the latest versions of CDMA2000 1X and next-generation CDMA equipment at thousands of cell sites.

It is the second announcement of 3G network upgrade work being awarded to a foreign company in recent weeks. Alcatel-Lucent won a US$230-million contract from China Telecom to provide CDMA equipment in 56 cities, the French company said earlier.

China will issue its 3G licenses at the end of the year, which will attract 200 billion yuan (US$29.4 billion) investment, the Ministry of Industry and Information Technology said.

"During this tough time, the 3G and related investment will become a highlight of the Chinese economy," said Sandy Shen, an analyst at Gartner, a US-based research firm.

Foreign equipment makers had to secure such contracts as home-grown vendors such as Huawei and ZTE have grabbed their market share in domestic and overseas markets, Shen said.

In home-grown 3G, or TD-SCDMA, network equipment bids, ZTE and Huawei dominate market share.

China Mobile will get a license for TD-SCDMA. China Unicom will operate a WCDMA system while China Telecom will get a license for CDMA2000 technology.

In the handset sector, Motorola has lost market share to Nokia, Samsung and Sony Ericsson in the third quarter, according to Gartner.

(Shanghai Daily December 17, 2008)