Cogo Forecasts New Revenue Potential with Upgrade of China's Mobile Networks to 3G
- Incremental Revenue to be realized in 2009
finance.yahoo.com
Wednesday January 7, 2009, 8:48 am EST
SHENZHEN, China, Jan. 7 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading provider of customized module design solutions and engineering and technology services globally, today reconfirmed its commitment to 3G and its forecast that the upgrade of China's mobile networks will provide a new revenue potential for the company in 2009.
Related Quotes
Cogo's optimism regarding 3G is supported by current telecom industry trends and news. China boasts the fastest growing telecom market in the world and forecasts 55 million CDMA mobile phone shipments in 2009. More than one third of China Telecom's existing PHS subscribers are expected to convert to the next generation mobile phone technology this year.
The Chinese government's award of 3G licenses to the three state-run carriers will help fuel the telecom industry's dramatic growth this year. China Mobile, which owns 72% of the country's wireless market, received a license for TD-SCDMA, China Telecom for CDMA 2000, and China Unicom for WCDMA. The upgrade of China's mobile networks to various versions of 3G will benefit both Cogo's telecom and handset businesses with solid revenue potential for 2009.
Cogo has already seen results from partnerships with key telecom companies such as Huawei, ZTE and Alcatel-Lucent, and the company expects to continue to record revenue throughout the year. Cogo forecasts that Huawei and ZTE's share of the Chinese wireless telecom market will expand significantly in 3G versus their current position in the 2G market.
Outlook for Cogo's handset business also remains strong. Cogo is the sole agent in China for VIA Technologies, a leading CDMA baseband technology vendor, and its subsidiary, VIA Telecom, for the sales of its baseband CDMA 2000 technology used for handsets in the China Telecom network. Cogo was already awarded VIA Telecom chipset design win from BYD, China's major original design manufacturers with customers including some of the world's leading mobile phone makers. The company expects growth of 3G technologies to accelerate as demand increases for these higher content handsets offering new features such as CMMB, a version of mobile television found in the domestic Chinese market.
"Cogo has already begun to benefit from the roll out of networks in China, which we would expect to continue throughout 2009, especially now that the government has awarded its 3G licenses," said Jeffrey Kang, Chairman and CEO, Cogo Group, Inc. "Our relationships with Huawei, ZTE, VIA, and other leading technology and equipment providers will leave COGO well-positioned to benefit from the upgrade of China mobile networks to 3G." |
