China Putian and Nortel (NT) signed a Joint Venture Framework Agreement to establish a joint venture for research and development, manufacture and sale of 3G mobile telecommunications equipment and products to customers in China.
China's Premier Wen Jiabao and Canada's Prime Minister Paul Martin, currently on an official visit to China, witnessed the signing ceremony.
Under the Joint Venture Framework Agreement (JVFA), China Putian and Nortel agree to prepare and negotiate with each other on a definitive joint venture agreement by June 30, 2005.
When established, the new company – named Putian-Nortel Networks Telecommunications Equipment Co., Ltd. – will likely be headquartered in Wuhan, capital of Hubei Province, and will focus on TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) and WCDMA (Wideband CDMA) products and solutions, as well as related network engineering and optimization services. China Putian will own 51 percent of the joint venture; Nortel, the remaining 49 percent.
"The signing of today's JVFA signals a new level of cooperation between Nortel and Putian," said Xing Wei, president, China Putian. "It will position us to capitalize on the tremendous opportunities presented by China's rapidly growing wireless industry and to significantly accelerate the internationalization of our 3G offerings."
"The JVFA strategically reinforces our commitment to driving the evolution of China's telecom industry," said Bill Owens, president and chief executive officer, Nortel. "Nortel and Putian are both leading telecom players in the market, and this collaboration will not only enable us to fully leverage our respective resources and expertise in wireless networking solutions, but will also strengthen our capability to offer industry-leading solutions for our customers and new prospects in China.
The current agreement builds on a June 2004 Memorandum of Understanding (MoU) signed by China Putian and Nortel for cooperation on R&D and manufacture of 3G equipment and products. The two companies have already cooperated on such projects as the recent 3G field trials sponsored by China's Ministry of Information Industry (MII).
A front-runner in the development and commercialization of TD-SCDMA technology and products, China Putian is a director of China's TD-SCDMA Industry Alliance and, by rotation, the current chair.