NEC Aims to Boost Network Equipment Sales as More Phone Carriers Adopt LTE

NEC Corp., Japan’s biggest personal computer maker, aims to boost sales of equipment for high-speed wireless services as more carriers upgrade their networks.

NEC expects 70 billion yen ($852 million) of LTE, or Long Term Evolution, technology equipment sales by fiscal 2012, Associate Senior Vice President Shunichiro Tejima said today. The company expects to get 20 percent of that from overseas markets, he said.

NEC is vying with Fujitsu Ltd. to win equipment contracts as NTT DoCoMo Inc., Japan’s biggest wireless carrier, and other telecommunications companies invest in rolling out faster services. DoCoMo last month started its domestic LTE service and plans to spend 35 billion yen in the year through March, upgrading the system to help cell phones and other mobile devices transfer data at the speed of a fiber-optic network.

NEC fell 1.2 percent to 239 yen at the 3 p.m. close of trading in Tokyo.

DoCoMo plans to increase the number of its LTE transmission stations to 5,000 by the end of March 2012, an increase that would extend the network’s coverage to 20 percent of the population from 7 percent this fiscal year. KDDI Corp., Japan’s second-largest mobile-phone carrier, is currently testing its own LTE network and plans to roll it out in 2012.

Demand Outside Japan

NEC is also betting it will be able to capitalize on demand outside of Japan for faster wireless networks. Spain’s Telefonica SA, Europe’s second-largest phone company, is using base stations and core networks, devices used to store user data, purchased from NEC in a trial network, the Japanese company said in October.

NEC forecasts operating profit, or sales minus the cost of goods sold and administrative expenses, of 100 billion yen on sales of 3.3 trillion yen this fiscal year. The company’s carrier network unit, which supplies undersea transmission cables along with wireless equipment, is forecast to post 40 billion yen in operating profit on revenue of 660 billion yen.

Some 180 phone companies in 70 countries are considering the introduction of LTE networks, according to NEC. Already 17 carriers, including Verizon Communications Inc. have introduced LTE service, it said.

To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Maki Shiraki in Tokyo at Mshiraki1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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