China Mobile’s Big (Procurement) Call

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China is a big place, used to big deals. It is also fast-moving, and nowhere more so than in the (recently restructured) telecoms sector. Not everyone going to China gets it right – and Apple got bruised recently in its negotiations with China Mobile. However significant successes do some to some – with that very same company – which is suddenly on something of a policy-induced shopping spree. China Daily reports:

    “Sun Microsystems Inc also announced a framework agreement with China Mobile on IT products and services projects in 2008. Sun will provide China Mobile with IT products and relevant services at an estimated price of some 34.8 million dollars”

The FT notes another China Mobile deal:

    “Alcatel-Lucent on Tuesday trumpeted a framework agreement with China Mobile that could lead to $1bn of additional revenues.”

Good news for them perhaps, but the FT goes on to reveal the hard end of the deal:

    “…But brutal competition means margins tend to be wafer thin.”

As Apple found out, that may be the cost of entry. The question is how far they can make it pay in the long term, once they have the platform and access on which to build. In the meantime, we can expect the telecom restructuring to make more commercial waves.

See news sources:

    Alcatel-Lucent’s China deal
    Published: Tuesday 17 Jun 2008 12:35
    Alcatel-Lucent trumpeted a framework agreement with China Mobile that could lead to $1bn of additional revenues. But brutal competition means margins tend to be razor thin

    China Mobile’s upgrade bid
    Xinhua, China – Jun 17, 2008
    The agreement was secured through Alcatel-Lucent’s flagship company in China, Alcatel Shanghai Bell. “We are delighted to be selected to continue providing …

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