Canadian telecommunications equipment maker Nortel yesterday signed a contract with China Telecom to install packet-switching equipment for commercial trials in Beijing, Shanghai, Guangzhou and Shenzhen local networks.
Commercial terms were not disclosed, but the head of Nortel's voice-over Internet protocol business Sue Spradley compared it to a US$1 billion contract Sprint awarded Nortel to change its local networks to packet-switching, from circuit-switching.
'When we announced the Sprint local contract, that was for about 18 states in the United States, which are much smaller than what China Telecom would offer [in] population and density,' she said.
'The biggest city in that was probably Las Vegas, which is a third of Beijing.'
The mainland is one of the major growth markets for telecoms network equipment, for wired lines and for mobile. Beijing-based Norson Telecom Consulting estimates total spending last year was about US$18 billion. Nortel claimed more than US$1 billion of that.
Spending on packet-switching equipment by Asian telecoms networks could total US$8 billion in three years and be one of the key engines for recovery in the telecoms hardware industry, Nortel said.
At least US$2 billion of the US$8 billion would be in China. By 2005, the mainland would account for about 15 per cent of global packet-switching spending.
