Nokia Corp has announced that it has agreed to form a RMB 900m ($111.3m) joint venture with China Putian Co Ltd covering R&D, manufacturing, and sales of 3G network solutions for TD-SCDMA and WCDMA technologies.
Telecoms equipment and services provider China Putian will have a 51% holding and Nokia will hold the remaining 49%. Products of the venture will be marketed under the Potevio brand held by China Putian. It plans to launch TD-SCDMA and WCDMA systems in 2006 when China is expected to grant 3G licenses.
If China opts for its own TD-SCDMA standard, Nokia will benefit by lining up with a company that has developed the technology. Nokia said it would continue to sell WCDMA systems under its own brand both globally and in China, raising the possibility of it competing with the joint venture.
Ericsson recently set a target to win 35% of the $10bn to $12bn it expects Chinese firms to spend within three years of the granting of the 3G licenses. It plans to invest $1bn in China over the next five years to cement its position in what it expects to soon be the world’s biggest market for mobile communications
Nokia said it has cooperated China Putian on GSM technology for over 10 years and the new joint venture will strengthen the partnership.
China Putian CEO Xing Wei said it was among the first companies to pass the TD-SCDMA field trials, organized by the Chinese Ministry of Information Industry. We are happy to extend our cooperation with Nokia, which has such strong competence in WCDMA, and are confident that the new joint venture will be successful, she said.
China Putian has long been seen as the key to China’s market and signed an memorandum of understand with Nortel Networks in 2004 covering cooperation on the R&D and manufacture of 3G equipment and products.
Sony Ericsson is a shareholder with China Putian in handset maker Beijing Ericsson Putian Mobile Communications Ltd.