Nokia Siemens Networks (NSN) has won a €550 million (US$876 million) network expansion deal with China Mobile, the world’s largest mobile operator by subscribers. In a statement from NSN, the vendor says it will “design, build, maintain and optimise the radio and core network for China Mobile, which will include the market-leading energy efficient Flexi base station, mobile softswitching and Operating Support System solutions in key provinces and cities across China.” A NSN spokesman told Reuters that today’s announcement is “a summary of our business with China Mobile in the first half of the year.”

Reports suggest the deal does not involve 3G equipment, and is instead based on the operator’s existing GSM network. The Chinese government is yet to issue 3G licenses, although China Mobile is planning to have a TD-SCDMA network up and running in time for the Beijing Olympics in August, following earlier trials in eight cities. Last month, Alcatel-Lucent won a US$1 billion deal with China Mobile to supply equipment that includes local 3G standard TD-SCDMA. The Alcatel-Lucent deal prompted analyst fears at the time that vendors such as NSN had lost business at the Chinese operator. China Mobile has reportedly been ordered by the country’s Ministry of Information and Industry (MII) to sign up more than 100 million subscribers to its 3G TD-SCDMA service in the next three years.