Ericsson, the world's largest telecoms equipment maker, has opened a representative office in Guiyang, the capital of southwest China's Guizhou Province.

The move underlines the increasing importance of western China, seen by many as a promising emerging market for manufacturers of telecoms equipment and systems.

Mats H. Olsson, president of Ericsson, China region, said western China, where mobile phone penetration remains low, is a region full of growth potential for his firm.

In coastal regions and big cities such as Beijing, the telecoms markets are recording "not much growth" as telephone penetration is already high, according to Olsson.

But telecoms operators in the less-affluent western China are aggressively expanding their networks to sign up more and more new mobile phone subscribers, unleashing big deals for equipment makers.

For example, telephone penetration in Guizhou last year stood at only 21.58 percent, while in Beijing the mobile phone penetration alone has already climbed to 90.6 percent.

Last year, the number of mobile phone users in Guizhou surged by 31.42 percent year-on-year.

Ericsson is the first multinational telecoms vendor to establish an office in Guizhou.

Graeme McCusker, general manager in charge of Ericsson's Western China operations, said the firm will continue to tap into the region by aggressively increasing investment, outsourcing and research and development (R&D) activities.

Ericsson's western China operations are headquartered in Chengdu, the capital of Sichuan Province, overseeing the markets of Sichuan, Chongqing, Yunnan, Guizhou and Tibet.

Recently, Ericsson included central China's Hunan Province in its western China operations.

The six provinces, with a total population of about 300 million, is becoming one of the most attractive markets for telecoms equipment makers due to the government's commitment to developing the region and the expected launch of 3G (third-generation wireless) mobile services, noted McCusker.

Earlier this month Ericsson announced it will invest US$1 billion in China over the next five years.

Western China is expected to receive a significant portion of that investment.

(China Daily September 27, 2005)