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Ericsson wins China Mobile services deal

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CIOL Bureau
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STOCKHOLM, SWEDEN: Mobile telecom gear marker Ericsson has won its largest-ever managed services deal in China, a three-year contract with China Mobile to maintain 22,000 base stations in Hebei province.

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Ericsson, the world's top mobile network equipment firm, gave no financial details of the deal, but its stock was up 2.1 percent at 86 crowns at 0853 GMT, outperforming the European Technology market .SX8P, which was up about 0.5 percent.

China Mobile Hebei has 35 million subscribers.

"It is one of the bigger contracts they could get (in China), and of course they are continuing their good collaboration with China Mobile," Sydbank analyst Morten Imsgard said.

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"Strategically it is very relevant they keep getting these deals since ... they need to move more and more toward the soft side of the business instead of just being a hardware vendor."

China's three main telecoms operators spent about $21 billion last year building 3G mobile networks, following long delays in the awarding of licenses.

In March this year, Ericsson said it had signed a framework deal worth $1 billion with China Mobile, the world's biggest mobile carrier, with more than 500 million subscribers.

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But the Sweden-based company wants a bigger share of China Mobile's 3G network business.

Ericsson said earlier this year it had only got around 5-10 percent of China Mobile's 3G business so far, with the bulk going to local players Huawei Technologies and ZTE Corp.

Ericsson reports its second-quarter results on July 23.

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