Nortel Networks Corp. on Thursday said it has agreed to form a new company with China Putian Corp. for the research and development, manufacture and sale of third generation mobile telecommunications equipment.
Putian-Nortel Networks Telecommunications Equipment Co. Ltd. would be based in Wuhan, capital of the Hubei Province in China. Under the agreement, which is expected to be finalized June 30, China Putian would own 51 percent of the new company, with Nortel owning the remaining 49 percent.
The combined company is expected to focus on building equipment used in high-speed TD-SCDMA and wideband CDMA wireless networks.
"The signing of today's JVFA (joint venture framework agreement) signals a new level of cooperation between Nortel and Putian," Xing Wei, president of China Putian, said in a joint statement with the Canadian telecom-equipment maker. "It will position us to capitalize on the tremendous opportunities presented by China's rapidly growing wireless industry and to significantly accelerate the internationalization of our 3G offerings."
The latest agreement follows a June 2004 memorandum of understanding signed by China Putian and Nortel for cooperation on R&D and manufacture of 3G equipment. The two companies have already cooperated on such projects as the recent 3G field trials sponsored by China's Ministry of Information Industry.