Great Wall gains position CDMA net in full-scale expansion
chinadaily.net
Date: 07/18/99
Author: Wang Chuandong
Page: 1
China Unicom, the country's most powerful telecommunications operator, now faces a competitor in the lucrative CDMA
(code division multiple access) cellular network market. Indeed, Great Wall Telecom has been allowed to become independent
as opposed to merging.
After analysis of the context, the State Council has permitted Great Wall Telecom to offer commercial services, said an official
with the Telecommunications Administrative Bureau under the Ministry of Information Industry (MII).
Initially, the State had decided that Great Wall Telecom, a joint venture between the military sector and China Telecom, would
merge with China Unicom early this year.
China Telecom, which is to be divided into four independent parts, will put an end to its co-operation with Great Wall Telecom,
said the official.
The State Council is reluctant to allow China Telecom to participate in the CDMA network, a sector reserved for China
Unicom, the official told Business Weekly.
Industrial insiders say the independence of Great Wall Telecom will bring relief to foreign equipment suppliers. They have been
anxiously hoping to win certificates from China Unicom.
Earlier this year, China Unicom confirmed that it would eventually choose two to three CDMA equipment suppliers among six
telecom candidates after merging with Great Wall Telecom.
At present, Great Wall Telecom, on a trial basis, conducts CDMA business in four cities: Guangzhou, Beijing, Shanghai and
Xi'an, with systems from Lucent Technologies, Motorola, Samsung and Nortel Networks.
Challenge is anticipated for China Unicom's dominance as the Great Wall network is widely believed to be able to grow
nationwide.
However, to establish a nationwide telecommunications network, the telecom bureau's official said the military sector is likely to
seek another partner to provide commercial services.
"The new changes will not affect our scheme to initiate the CDMA project. After all, such a large telecom market can hardly be
operated by one company," said Tan Xinghui, director at the planning and marketing department of China Unicom.
As China plans to popularize the US-favoured CDMA cellular network, a lucrative telecom market is set to emerge in the near
future.
Although facing a new competitor in the CDMA market, China Unicom will be able to accelerate its listing process with the
help of Great Wall Telecom's pullout.
According to insiders, China Unicom plans to go public on the Hong Kong Stock Exchange and abroad in October. The move
has been approved by the China Securities Regulatory Commission.
"The listing aims at easing the deep-rooted problem of capital shortage," said an official with China Unicom.
However, he said that before going public, the company will compensate for foreign partners involved in the financing of
China-China-foreign (CCF).
The CCF mode, regarded now as an irregular operation by the government, involves first moving capital into a China-foreign
joint venture.
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