Mainland set for US standard [China CDMA 2000 approval expected]
technologypost.com
Friday, March 19, 1999
TELECOMS
YVONNE CHAN
Mainland officials are believed to have approved the
American-developed CDMA 2000 mobile phone
standard, a move that would be a serious blow to
European equipment suppliers.
The government had been hesitant to approve CDMA
(code division multiple access) wireless technology and
instead has favoured the European GSM (global system
for mobile) standard, which dominates mainland
networks.
Swedish mobile vendor Ericsson, with the co-operation
of European partners, has developed wideband CDMA
(W-CDMA), which is incompatible with CDMA 2000
- a third-generation wireless technology developed by
US manufacturer Qualcomm.
Adoption of CDMA 2000 would be a major gift to the
United States, said a source.
US companies would greatly benefit from sales of
equipment and licensing manufacturing agreements for
handsets.
The People's Liberation Army - which generates profits
by selling excess network capacity for civilian mobile
networks - could also cash in because it has a
nationwide spectrum for CDMA.
An official announcement for CDMA adoption is
expected next month during Chinese Premier Zhu
Rongji's trip to Washington.
He dangled a carrot to US companies earlier this week
with the promise of foreign participation in the
mainland's 180 billion yuan (about HK$167.58 billion)
telecommunications industry.
The Internet and mobile-phone markets might be the
first to allow outside investment, said Big Brains analyst
Peter Lovelock, although details of Mr Zhu's plan had
so far been keep closely guarded.
The basic residential telephone market would be one of
the most attractive sectors to foreign companies, Mr
Lovelock said, but it was questionable whether the state
would liberalise it at this early stage.
The impending breakup of state monopoly China
Telecom - which is necessary for the mainland's entry
into the World Trade Organisation - was believed to
have been delayed under the protective guard of
Information Industry Minister Wu Jichuan.
Mr Zhu was apparently successful in getting State
Council approval to sack the minister, said Mr
Lovelock, who predicted that Mr Wu would depart by
May, although his successor was not yet known.
More than 40 foreign companies have already
collectively invested about US$1.4 million in the only
existing telecoms competitor, China Unicom, under a
now-outlawed joint-venture scheme called
China-China-foreign (CCF).
Under CCF, foreign companies partner with mainland
firms to fund a joint venture, which in turn forms another
joint venture. The foreign firms receive "consulting fees"
in return.
The government so far has shown no signs of backing
down from its stance on CCF ventures and there is
speculation that Unicom's foreign partners could be
compensated or bought out.
Liu Cai, director of the information ministry's policy and
regulation department, recently acknowledged that the
national telecoms industry had been a target for criticism
focused on problems "such as its monopoly and
consequent high phone fees and poor service".
His vision for liberalising the basic telecoms service calls
for "reasonable competition", with the government
"supporting competitors in a planned, step-by-step
fashion".
Satellite communications and the wireless
mobile-telecoms market would have "limited
competition", with the state "granting a reasonable
number of operating licences and overseeing them", he
said.
Copyright (c)1999. South China Morning Post Publishers Ltd. All Rights Reserved.
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