China Unicom Signs On CDMA Line
BY KRISTY BASSUENER
MAY 15, 2001
In a boon to Qualcomm and CDMA vendors across the globe, China Unicom
signed CDMA contracts worth between $1.5 billion and $2 billion. The deals end
weeks of waiting, since the signing of the contracts was delayed over the
country's labor day holiday while vendors and their investors worried that strained
relations between China and the United States might affect China Unicom's
decision to use CDMA for its mobile networks.
Motorola's deals with China Unicom for 800 MHz CDMA infrastructure gear are
worth a combined $407 million, and the company claimsin its statement that it
won the largest dollar amount to a single infrastructure provider. But a Lucent
spokesman boasts its winnings are bigger than Motorola's, and a statement
says Lucent's contract is 'the largest CDMA contract ever in China.' The
spokesman says its arrangements with China Unicom preclude Lucent from
releasing an exact dollar amount, but wire stories say the Lucent contract is worth
$420 million.
Nortel Networks of Canada snagged a $275 million chunk of the CDMA business,
and expects the networks to be operable by the end of this year. Ericsson also
cut itself a $200 million slice of China Unicom's CDMA budget, and plans to build
networks in seven of the republic's provinces.
Qualcomm, which owns patents for CDMA technology, will receive royalty
payments from China Unicom for the use of the technology. By midday,
Qualcomm shares were up more than 6 percent to $60.70.
China Unicom says it expects to have as many as 100 million mobile
subscribers using its GSM and CDMA networks by 2005. Mobile equipment
vendors and wireless carriers consider China, with its population of more than 1.2
billion, a promised land for expansion. At the end of 2000, the People's Republic
had about 85 million wireless users.
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