Unicom resumes CDMA
network
Oct 24 2000 10:24AM
Homeway
China Unicom, resuming its once-suspended proposal of
CDMA network construction, plans to expand the current
capacity of CDMA network and arrange necessary tests of
higher-level CDMA system, China Daily reports.
The country's second largest mobile communication
operator has gained the approval from the State Council to
acquire the country's CDMA operator Great Wall Telecom,
creating the world's first telecom service provider which
operates both GSM and CDMA networks.
Wang Jianzhou, executive vice president with China
Unicom, said that the acquisition process is under going
and the specific development plan of CDMA network has not
yet come out.
Great Wall Telecom, which is currently operated by the
military, is conducting trial CDMA network services in the
cities of Beijing, Shanghai, Guangzhou and Xi'an.
The mainstream mobile communication networks in China,
operated by China Mobile Communications Corp and China
Unicom, are based on the European GSM (global system of
mobile communication) systems.
The public has been confused by the changing attitudes of
China Unicom towards CDMA network construction. The
CDMA proposal was raised in later 1998 when the State
Council authorized China Unicom to solely construct and
operate CDMA network.
Wang attributed Unicom's changing strategies to the
unpredictable government policies over the arrangement of
Great Wall Telecom after the military was banned from
business operations last year.
China Unicom had announced suspension of the
narrow-band CDMA network construction in June this year,
sparking panic among the world's CDMA manufacturers.
"We're proposing to initiate CDMA project on the basis of
existing resources of Great Wall Telecom," said Wang.
"The network scale will depend on the market demand and
technology availability."
Wang said the necessary tests of higher-level CDMA
system will be conducted in the second half of this year.
China Unicom had seen the CDMA cellular network, a
US-favored mobile system compared with European GSM,
as its best shot at competing with China Mobile, who
monopolizes the country's GSM network.
However, the perfect timing of CDMA network construction
has been skipped because of the delays in the past years.
The construction also poses some potential risks upon
China Unicom since the current network available is based
on the narrow-band IS-95 second generation cdmaOne.
In contrast with the narrow-band GSM and CDMA network,
the third-generation (3G) telecom system, which is likely to
be commercialized in 2003, will enable much faster
transfers than current systems for bandwidth-intensive
services such as video images and other multimedia.
Moreover, it's quite difficult for one telecom service operator
to manage two different kinds of mobile communication
networks, which require adequate and complicated
technology support and maintenance.
In an effort to divert the potential risks, Wang said that
China Unicom will establish a subsidiary to operate the
CDMA network, which will not be within the listing company,
China Unicom Listed.
"But the listing company has the right to acquire the CDMA
network from the parent company when the CDMA market
is mature," said Wang. "Therefore, the potential risks of
CDMA construction will not affect the business of the listing
company."
China Unicom was listed both in New York and Hong Kong
in June this year. In spite of the risk, China Unicom will
benefit more from the operation of CDMA network.
Since the transition of narrow-band CDMA to the third
generation is smoother than the GSM network, China
Unicom has the chance to be the first 3G service operator in
the country.
"It's very important for a telecom operator to provide high-end
mobile services in advance," said Wang. The CDMA
construction authorization by the government also means
that China Unicom gains more precious telecom frequency
resources than other service operators.
The new network results in two large market demands in the
future -- CDMA telecom equipment and terminals. The
US-based Qualcomm, the main IPR (intellectual property
right) holder of CDMA technologies, becomes the biggest
winner among the beneficiaries from the CDMA network in
China.
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