Alcatel Shanghai Bell (ASB) Thursday denied the possibility of taking over Alcatel (Suzhou) Telecommunication Co Ltd, Alcatel's handset manufacturing outlet in China.

But newly appointed ASB President Gerard Dega stressed that the company is aiming to transform itself from a carrier equipment supplier to a communication solutions provider.

"The manufacturing of handsets is not the core business for Alcatel Shanghai Bell," said Dega.

He told a Beijing press conference that ASB is dedicated to providing end-to-end telecommunication solutions, which are suitable to any kind of handset terminal.

Recent reports have claimed that Alcatel is going to sell its handset business to domestic telecom equipment maker Nanjing Panda Electronics Co, alleging that negotiations between the two had already reached their final stage.

"For Alcatel, we are still looking for business opportunities and partnership to boost the handset business," Dega said.

But he did not elaborate on whether any kind of partnerships were agreed upon.

In a telephone interview with China Daily Thursday, Nanjing Panda Electronics Co denied the report. "No information about the negotiation is available," he said.

"We are currently integrating and adjusting our handset business to enhance our competitiveness," said a Nanjing Panda official who declined to be named.

Some claimed that Alcatel had been in contact with some Chinese handset makers since last year, including Panda and Shenzhen-based TCL.

Dega said that 2004 would be a year of transition for ASB to realize its goal of becoming China's telecom sector leader.

"With an enriched product portfolio, excellent research and development and a strong integration capability, we will match all kinds of requirements from the fixed and mobile market, as well as enterprises and institutional market," he said.

According to Dega, the company will focus on several major businesses such as broadband access, the third generation of mobile communications (3G) and the next generation network (NGN) this year.

"China will be the largest market for 3G, not only because of the huge market demand, but thanks to its increasing leadership in the international market," he said.

Analysts predicted that 3G investment in China will be 1 trillion yuan (US$120 billion) in five years.

Alcatel set up a 3G Reality Center in the ASB headquarters in Shanghai in August in order to tap into market demand.

The center provides a fully featured and live 3G environment to test innovative applications and services with local partners.

The center has already conducted laboratory and field trials on 3G infrastructure and new mobile applications in China, according to Dega.

The center is also the heart of Alcatel's 3G Reality Center Asia-Pacific network and is connected to a similar center in Paris.

Speculation is mounting that the Chinese Government will issue 3G licenses later this year or early next year, sparking enhanced enthusiasm for 3G in China as both foreign and domestic telecom-related companies hope to turn their 3G dreams into reality.

"As one of the key manufacturing bases in Alcatel, ASB is turning itself from a single-product manufacturing platform into a multi-products base," Dega added.

Outsourcing manufacturing revenue reached US$100 million last year, 10 times the 2002 figure, according to Dega.

(China Daily March 5, 2004)