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NEC is setting up a new company in China with the primary goal of developing the Chinese 3G mobile market. The company, facing declining sales in Japan, believes China will be a vital new growth area particularly in 3G. It is already participating in field trials of 3G technology in China with a variety of vendor and operator partners.

NEC is folding its all its existing telecom manufacturing, marketing, service and maintenance operations into the new organisation, NEC Telecommunications China. The new company will be headed by Brian Lu, former head of Motorola's personal communications services division.

NEC says that the manufacturing operation will continue, but that the new structure of the company would mean it could "strongly commit itself" to the 3G mobile business in China. It added that it also plans to merge its specialist mobile businesses Xi’an NEC Radio Communications Equipment and Guilin NEC Radio Communications by the end of the year.

Tsutomu Nakamura, senior vice-president at NEC said that China provided an important opportunity for his company: "With a subscriber base of 270 million, China is one of NEC’s most important markets where NEC can demonstrate its full competence in mobile Internet and 3G." ®

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