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April 5, 1989

NORTHERN TELECOM, ERICSSON MAKE HAY WHILE SUN SHINES ON THE CHINESE MARKET

By CBR Staff Writer

Northern Telecom Ltd and L M Ericsson are claiming to have taken major steps in their efforts to become major suppliers of telecommunications equipment to the People’s Republic of China. Northern Telecom Inc has just introduced its first DMS-100 digital switching systems into China, with the switch providing 8,000 telecommunications lines to three cities in Jiangxi province, 900 miles south of Beijing; the company has installed 6,000 telephone lines and two remote switching systems, each providing 1,000 lines of service. The installation is part of a $6m contract, won in 1987, in which Northern Telecom will provide systems with a capacity of 10,000 lines to the Provincial Post and Telecommunications Administration in Jiangxi; the company says it is introducing a number of features new to the region, including direct dial services. Northern Telecom has already agreed to build a telecommunications equipment factory with Tong Wang Electronics in the Shekou area of Guangdon province. Commitment Meanwhile, Ericsson Australia has signed a general telecommunications contract, worth $31m, announcing deals with two telecommunications organisations in the eastern province of Zhejiang; Ericcson will supply 12 of its AXE exchanges, including subscriber and trunk lines, and power and transmission equipment: the AXE exchanges will be installed from 1990. Statements from leaders of Chinese industry, emphasising the significance of telecommunications, has alerted a number of major western companies: Alcatel and Siemens are also among the leaders in the race for Chinese business. Communications has been given top priority in the country’s seventh five-year plan, which began in 1986, and Chinese leaders want a telecommunications infrastructure to rival those of developed nations within 50 years. The biggest areas of demand include large switches for urban areas, smaller capacity switches, transmission equipment, microwave radio, optical fibre technology and satellite equipment. Though this sounds encouraging for Western firms, the Chinese authorities have made it clear that the country is looking for long term commitments to the nation’s telecommunications, and will reject proposals that fall short on this count.

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