RE: Unicom to Lease CDMA Network2002
rosadeng
1/20/01 8:48 pm
Not trying to pour cold water here, but looks like it hasn't started yet. Bidding could come in March. We should hear something from cc on thursday.
I saw one complain from ZTE's executive. When asked if Unicom started in Dec, last year, he angrily said, "How come we don't know anything? What we know is that they may start next month or even as late as next, next month(March, I understand), If they don't get this thing done this year, our domestic manufactures will have no chance anymore! I know they have difficult to handle two networks, but there is certainly big enough market for two networks."
Also, I don't think the WTO is the key roadblock here. The key roadblock is Qualcomm's rigid position on IPR. The original frame work calls for required use of Q's chips in exchange for lower roylty rate which was the real political poison which have almost killed the deal. In hindsight, they should not have worried about chip sale at all, as IJ stated that the technical complexity would give Qualcomm extra protection on IPR issues. And now we know who else can make a good cdma chip besides Qualcomm?
As I stated before, the Chippack deal is very smart. The next big thing is to fab the chips in China or even make most of the chips in China and let China to enjoy some export of cdma chips. To fab chips in Taiwan may save a few pennies but gains no customers and especially gains no political clout. It is feasible to do because Taiwanese firms ARE moving fabs to China anyway.
Another reason the WTO is not that important is that by looking at other companies, such as Cisco, HP, Intel are all doing very well in China. Cisco prodicted China will be their number 2 market after the US in two years. A few years back, even now, you can buy a Windows98 or even Windows2000 for $2 to $5 on the street. However, Microsoft makes hundreds of millions in China now. China will change and following international rules gradually, but not overnight. You can wait, but better watch out. See GSM monopolized China?
Another politcal pressure coming inside China is from the domestic GSM camps. After many years, they just started to challenge the big three. After owns 7% in 1999, they have progressed to 13% last year. Although about ten companies signed up with Qualcomm, ZTE has been the only political voice heard loud in China.
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