Chinese President Hu Jintao was on hand yesterday in Sweden to witness a US$1 billion GSM expansion framework deal signed between Ericsson (ERIC) and China Mobile (CHL).

President Hu Jintao was joined at the signing ceremony by Swedish Prime Minister Fredrik Reinfeldt. Wang Jianzhou, chief executive of China Mobile Communications Corporation, and Carl-Henric Svanberg, president and CEO of Ericsson, joined the two leaders at the ceremony.

Svanberg said, "Ericsson is proud of its cooperation with China, which dates back over a century. We are dedicated to supporting the development and growth of China's telecom industry with our global expertise and proven competence. The agreement we are announcing today is further proof of this."

Ericsson's commitment to operations in China is reflected by its continuous increase in local sourcing, up to US$2.5 billion in 2006, and growing export opportunities, with US$1.6 billion in exports last year. Under the new framework agreement, Ericsson will supply core and radio network equipment, along with related technical support and services, to expand China Mobile's GSM coverage in 19 regions of China.

The expansion project, which strengthens Ericsson's position as the leading mobile communications supplier in the Chinese market, will allow China Mobile to boost network capacity and performance, creating new revenue streams from enriched data services and offering an enhanced user experience to hundreds of millions of its subscribers. Deliveries have already started.

A second major signing ceremony, between Sony Ericsson and China Postel Mobile Communications Equipment, a subsidiary of China National Postal and Telecommunications Appliances Corporation, also took place yesterday. Tan Xinghui, president of PTAC and chairman of China Postel; Carl-Henric Svanberg, in his capacity as chairman of the board of Sony Ericsson; and Gunilla Nordstrom, president of Sony Ericsson China, witnessed the agreement for US$600 million of mobile phone purchasing.

Sony Ericsson also recently announced a Memorandum of Understanding with Shenzhen Telling Communications Corporation for mobile phone purchasing valued at more than US$500 million.

The Chinese President is in Sweden on a state visit at the invitation of King Carl XVI Gustaf of Sweden. This is the first visit by a Chinese president to Sweden since the two countries established diplomatic relations in 1950.