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To: Boplicity who wrote (54431)	12/16/1999 1:47:00 PM
From: Ruffian	Read Replies (1) \| Respond to of 152472

Nortel's China Unit To Up Sales After Govt Restructuring By IAN JOHNSON BEIJING -- Sales of telecommunications equipment in China will double next year after investment, which was stymied this year by the central government's restructuring, is reinstated, Robert Mao, chief executive officer of Nortel Networks (China) Ltd., a unit of Nortel Networks Corp. (NT), said. Mao said China will invest nearly $13 billion in telecommunications equipment next year. Sales dipped this year to $7 billion. China has just completed a huge restructuring of the central government, slashing a third of its jobs and trying to separate state-run companies from government regulators. "We expect a catch up in 2000," Mao added, although investment next year in the sector still will fall short of the $18 billion that China said it spent in 1998. With a market share of about 6% of equipment sales, Nortel hopes to boost sales through China Unicom's adoption of a new mobile phone technology called Code Division Multiple Access, or CDMA. That new technology will allow Unicom to compete better with the country's near-monopoly phone carrier, China Telecom, by giving Unicom a new product that is arguably better than China Telecom's Global System for Mobile telecommunications, or GSM, mobile phone technology. CDMA technology uses different frequencies than GSM, whose available frequencies are getting sold out in China. Adopting CDMA, however, could take longer than anticipated, Mr. Mao said. The government has ordained that Unicom get 10 million subscribers next year, but the first contracts aren't expected to be awarded until midyear. That means equipment companies such as Nortel would build the CDMA system from July onwards and the first customers could start using it only after October. "It's a very tight schedule," he said.