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Summary:

China Telecom is going forward with a plan to upgrade its existing mobile network to EVDO Rev. B. With 56 million subscribers on the China Telecom network, Qualcomm’s 3G royalty stream will keep earning checks for now, just as the COO had hoped last year.

Alcatel-Lucent said today that it’s inked a deal to be the sole equipment provider for China Telecom’s EVDO Rev. B data network expansion. While terms of the agreement — which follows the successful trial of Alcatel-Lucent’s Rev. B solution in three districts of Shanghai — weren’t disclosed, it’s also good news for Qualcomm, which earns royalties on every device that uses CDMA technology, including those running on EVDO networks.

China Telecom’s move to EVDO Rev. B will bring both multicarrier technology and end user speeds that are two to three times faster than EVDO Rev. A — Alcatel-Lucent in its announcement points to speeds of 6.2 Mbps for 2.5MHz and 9.3 Mbps for 3.75 MHz. Meanwhile, most of the world is already moving away from CDMA in favor of either LTE or WiMAX for 4G wireless networks. But with over 56 million China Telecom subscribers, Qualcomm’s CDMA royalty stream gains a new lease on life, much as Len Lauer, then Qualcomm’s COO, told Stacey at our Mobilize event last year.

There’s also the slimmest of hopes for Qualcomm here in the U.S.. Telecom Pragmatics thinks that Sprint or Verizon could possibly upgrade their Rev. A networks to Rev. B for transitional purposes, though both deny such efforts, saying they’re fully committed to WiMAX and LTE, respectively. One way or another, Lynette Luna of Fierce Wireless doesn’t think it’s time to write off Rev. B just yet:

“I think it may be sitting on the back burner as an option to fill in CDMA operators’ 4G holes down the line. I think HSPA/HSPA+ operators that are deploying LTE are doing the same thing with future iterations of HSPA. These technologies serve as a good fallback when LTE deployments don’t go exactly as planned, whether because of technology or economic reasons. The problem is you can’t predict when these fallback technologies will come to market.”

A fallback may be Qualcomm’s best bet, but with China Telecom, Qualcomm’s CDMA royalty train can continue down the tracks for a few years yet.

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