Under the Joint Venture Framework Agreement (JVFA), which was witnessed by China’s Premier Wen Jiabao and Canada’s Prime Minister Paul Martin, the two companies intend to reach a definitive joint venture agreement by June 30, 2005.

When established, it is likely that the new company, Putian-Nortel Networks Telecommunications Equipment, will be headquartered in Wuhan, capital of Hubei Province. It will focus on Time Division-Synchronous Code Division Multiple Access (TD-SCDMA) and Wideband CDMA (WCDMA) products and solutions, as well as related network engineering and optimization services.

China Putian, a developer of TD-SCDMA technology and products, will own 51% of the joint venture, while Nortel, a supplier of 3G networks, will hold the remaining 49%.

The JVFA strategically reinforces our commitment to driving the evolution of China’s telecom industry, said Bill Owens, president, Nortel. Nortel and Putian are both leading telecom players in the market, and this collaboration will not only enable us to fully leverage our respective resources and expertise in wireless networking solutions, but will also strengthen our capability to offer industry-leading solutions for our customers and new prospects in China.

The new agreement expands upon a Memorandum of Understanding signed by the Nortel and China Putian in June 2004 for cooperation on the development and manufacture of 3G equipment and products. The two companies have previously cooperated on projects such as the recent 3G field trials sponsored by China’s Ministry of Information Industry.

Nortel’s stock gained four cents, or just over 1%, to $3.83 on the Toronto Stock Exchange following news of the collaboration.