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Alcatel and Datang Mobile jointly announced today that they have entered into a partnership agreement to foster the introduction of TD-SCDMA in China. The agreement was signed through Alcatel Shanghai Bell, Alcatel's flagship Chinese company, today in Beijing, China, in the presence of Mr. Xi Guohua, Vice Minister of Information Industry in China. This co-operative effort is the first of its kind in the TD-SCDMA sector among the TD-SCDMA Alliance members.

According to the agreement, Alcatel will invest EURO 25 million in Datang Mobile, including share holding, product planning, system integration and manufacturing. Alcatel will support the research and development of TD-SCDMA and become the privileged partner of Datang Mobile for industrialization of TD-SCDMA products in China.

Leveraging Alcatel's expertise and advanced technology for large-scale manufacturing, Alcatel and Datang Mobile will together form a dedicated team to focus on the industrialization of TD-SCDMA products from Alcatel's manufacturing base in Shanghai. Thanks to this joint effort, the first TD-SCDMA products are expected to be delivered to the Chinese market by June 2005.

The partnership will also put both companies in a unique position to lead the TD-SCDMA market and achieve growth on this market as soon as the commercial deployment of 3G starts in China. According to the agreement, Datang Mobile will adopt Alcatel's core system and applications for TD-SCDMA solution.

According to XJ Wang, Senior Analyst, Yankee Group: "The new partnership agreement between Alcatel and Datang is a great news to the TD-SCDMA family. There could not be a better time for Alcatel to enter the TD-SCDMA development. Considering most of the TD-SCDMA deployments will be greenfield opportunities, winning TD-SCDMA contracts will certainly boost Alcatel's market share in the infrastructure business segment."

Zhou Huan, Chairman and President of Datang Telecommunication Group, said, "Today marks a significant milestone in China's 3G development. As a pioneer of TD-SCDMA technology, we share the responsibility of bringing this technology to the market. With Alcatel's expertise and experience, I am confident that we will be able to shorten the time-to-market of the TD-SCDMA products."

"We are proud of playing a part in fostering the development of China's home-grown 3G standards, "remarked Grard Dega, President of Alcatel Shanghai Bell. "With a strong partner like Datang Mobile, we will be able to offer Alcatel's customers a complete range of 3G mobile infrastructure solutions, regardless of the standard they adopt. The partnership will also complement our global experience in 3G to further strengthen our market position in China."

In addition to the partnership with Datang, Alcatel has recently commenced TD-SCDMA interoperability testing with China's Ministry of Information Industry, a development that evidences the depth of Alcatel's support for the TD-SCDMA standard.

Alcatel's user-centric broadband vision encompasses a full range of solutions to enable operators to deliver ubiquitous and easy broadband access to end-users. As an essential component of this vision, Alcatel's agreement with Datang Mobile on TD-SCDMA aims at benefiting the Chinese 3G mobile operators and end-users at large.