The telecom downturn that started in 2000 is nearing an end, according to a senior executive from the world's biggest wireless communications equipment business.

"We are in the final phase of correction after the information technology bubble burst three years ago,'' said Carl-Henric Svanberg, president and chief executive officer of Ericsson.

He predicted at the Ericsson Strategy and Technology Summit in Beijing on Thursday that this year's wireless communications market will decline 10 per cent year-on-year -- but that it is a big improvement over last year's 15 20 per cent decrease.

In 2004, the industry will stay at this year's level, Svanberg said.

The Swedish-based group reported its first pre-tax profits in almost three years on October 30.

Ericsson said that, without the expenses of its massive cost-cutting programme, it earned 1 billion Swedish kroner (US$129.5 million) for the third quarter, compared with a loss of 3.6 billion kroner (US$464 million) a year ago.

"You will see steady improvement and profits,'' Svanberg said.

He added the company will continue to develop powerful products, while improving cost-efficiency and a supply chain.

The telecom system supplier also said it will develop a common solution for WCDAM (wideband code division multiple access) and CDMA 2000, two major third-generation (3G) mobile communications standards in the world.

The solution is believed to save Ericsson's research resources and cut the investments and risks of telecom operators.

The Swedish firm is the biggest 3G equipment supplier in the world, with 44 WCDMA commercial contracts and 15 CDMA 2000 contracts.

Ericsson, already an active participant in the 3G testing organized by the Chinese Ministry of Information Industry, is also working with the research institute of Shanghai Telecom on several projects in East China, according to Jan Malm, president of Ericsson China Co Ltd.

He revealed that his company is reviewing the possibility of setting up another venture in Southwest China's Sichuan Province, which could be announced early next year.

He declined to disclose details, but it could be another research and development (R&D) base.

Currently, the firm has four wholly owned businesses and 10 joint ventures.

Malm said although Ericsson is a little behind its five-year plan for development in China, which aims to double its business locally from 2001-05, the blueprint will not be changed.

"We are behind our goal in terms of purchasing, but... it depends on how the market works,'' said Malm.

"On the other hand, Ericsson is also ahead of its schedule in investment of research and development.''

The company announced earlier this year that its total investment in R&D in China will be US$500 million from 2001 to 2005.

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