Nokia To Make CDMA Wireless Handsets in China

Nokia mobile phone manufacturing locations shown in BLUE with China added.

Nokia announced that it would merge its four existing joint ventures in China in a move that would substantially strengthen the operational efficiency and competitiveness of its China operations. In addition, Nokia also announced its plan to begin production of CDMA handsets.

The merger represents a major milestone for Nokia in China - it demonstrates Nokia's long-term commitment to China and underscores the successful collaboration between Nokia and its Chinese partners. With state-of-the-art technologies and Nokia's increased investment in research and development in China, the new company is well positioned to lead China's mobile handset and network markets as well as improving its competitiveness in the global market.

The new company will be headquartered in Beijing with branch offices in Dongguan and Suzhou, and will continue operations in each of the previous joint venture locations. In addition, parties agree that pending government approval, the new company will begin production of CDMA handsets, using Nokia chipsets. The new company represents one of the largest foreign invested enterprises, as well as the largest manufacturer and exporter in the mobile telecommunications industry in China.

The merger combines Nokia's four existing joint ventures into a single joint venture. The merged joint venture will be converted into a foreign-invested company limited by shares (CLS) subject to approval from relevant government authorities. The shareholders of the CLS will be Nokia, Beijing Capitel Co., Ltd. (Capitel), Dongguan Nan Xin Industrial Development Co., Ltd. (Nan Xin), Shanghai Alliance Investment Ltd. (SAIL), and Beijing Hangxing Machinery Manufacturing Corporation (Hangxing).

At the signing ceremony today, Ouyang Zhongmou, CEO and President of Putian Corporation, Nokia's largest China joint venture partner, made a speech on behalf of all joint venture partners: "We are extremely excited about the merger. It is a logical next step for what has so far been a very fruitful partnership. We have full confidence in the future development of the new company. As partners, we will continue to provide our most valuable resources to enhance the new company's overall strength. For us, the merger will not only bring increased opportunities for us in China, but also allow us to improve our competitiveness outside of China."

Also present at the event, Nokia Mobile Phones President, Matti Alahuhta said: "This is indeed an important milestone for Nokia in China and highlights our continuous commitment to the China market. China already is and will continue to be one of Nokia's major manufacturing centers globally as well as a major center for Nokia's global research and development. The move to begin local manufacturing of CDMA handsets would not only allow us to broaden our product offering to Chinese consumers but also allow the new company to capture opportunities in China's growing CDMA market."

President of Nokia China, Urpo Karjalainen said: "Nokia and our Chinese partners have already enjoyed a very successful history in China. This new company will serve to further strengthen cooperation among all our Chinese partners and will have a significant impact on Nokia's long-term development plans in China. By combining our manufacturing operations, we stand to gain a significant competitive edge in terms of economies of scale, flexibility and efficiency, which will allow us to compete more effectively in this exciting and fast-growing market."

About the new company

- It will be one of the largest foreign invested enterprises in China as well as the largest mobile communications manufacturer and exporter in China

- Operation managed in one new entity instead of the previous 4 joint ventures

- Nokia will be the major shareholder of the new company with over 60% ownership

- Continue operations in the current locations and plan to begin manufacturing CDMA handsets

- Chinese partners will remain unchanged

- New name and new board of directors will be announced pending approval of authorities

Backgrounder of the previous 4 joint ventures

Beijing Capitel Nokia Mobile Telecommunications Co., Ltd. 1995 Beijing Capitel Co., Ltd. Manufacture of mobile telecommunications infrastructure systems and mobile phones

Beijing Nokia Hangxing Telecommunications Systems Co., Ltd. 1994 Beijing Hangxing Machinery Manufacturing Corporation Manufacture of Nokia digital mobile switching systems

Dongguan Nokia Mobile Phones Co., Ltd 1995 Dongguan Nanxin Industrial Development Co., Ltd. Manufactures advanced Nokia mobile phone products

Nokia (Suzhou) Telecommunications Co., Ltd. 1998 Shanghai Alliance Investment Ltd Manufactures Nokia base stations and cellular network transmission equipment

This Press Release Sponsored by AGILENT TECHNOLOGIES

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