L.M. Ericsson Telephone Co. (ERIC) said Wednesday that it has won deals totaling $1.7 billion to deliver second- and third-generation mobile communication equipment to Chinese operators China Mobile Communications Corp. and China Unicom, indicating rapid growth on the country's telecom market.

Mats Olsson, the Stockholm-based equipment vendor's president for Greater China, told Dow Jones Newswires that the value of the deals is roughly equivalent to Ericsson's entire sales in the country during 2008, adding that "this reflects the growth we feel in China."

The framework contract with China Mobile, valued at $1 billion, includes products and solutions to expand the company's networks in 18 Chinese provinces.

Under the framework agreement with China Unicom, valued at $700 million, Ericsson will upgrade the operator's GSM networks in 10 provinces and provide GSM/WCDMA networks and wireless access system in 15 provinces.

Chinese operators were awarded 3G mobile phone business licenses from the authorities as recently as January. Western gear companies like Ericsson and Alctatel-Lucent (ALU) have since then been fighting for market share in the country, aiming for a slice of its investment in improving the networks as growth on other markets slows.

Olsson described the composition of Wednesday's deals as favorable, noting that the Chinese operators have been quick to adopt 3G technology since the licenses were awarded.

Ericsson has already started delivery under the framework agreements, which will run for "a good part" of the remainder of the current year, he added.

Analyst Pierre Ferragu at Bernstein said the news was expected but still positive for Ericsson. He said Bernstein expects the equipment maker's sales in China to grow 12% in 2009, and added that following Wednesday's agreements "the chances for Ericsson to deliver even better growth in China than what we expect are now very high."

Swedbank analyst Hakan Wranne said the framework agreements had been expected by investors for some time, so that the value of the deals should already be reflected in Ericsson's share price. Still, at 1440 GMT, shares in the company were up 0.3% at SEK75, outperforming a 0.3% drop in the wider Stockholm market.

Company Web site: http://www.ericsson.com

-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com