China Unicom eyes CDMA network by mid-2000 -report
Reuters, Saturday, December 11, 1999 at 23:45
BEIJING, Dec 12 (Reuters) - China Unicom, the country's
second telecommunications service provider, is set to complete
a nationwide CDMA cellular network by the middle of next year,
the China Daily Business Weekly said on Sunday.
The newspaper quoted a Unicom official as saying the
carrier would choose among bids by 12 foreign and domestic
manufacturers of CDMA (Code Division Multiple Access) equipment
in January.
Construction would begin early next year and the first
phase of the network would be finished by summer, said Tan
Xinghui, general manager of Unicom's planning and marketing
department.
"We cannot wait or be delayed any more since the third
generation of mobile communications is coming," Tan said.
Tan estimated the company would need five or six equipment
providers to meet its ambitious plans to build a nationwide
network based on the U.S.-pioneered CDMA standard.
Foreign suppliers with CDMA manufacturing capability in
China would be given priority in bidding, the Business Weekly
quoted Unicom vice-president Lu Jianguo as saying.
The newspaper cited Motorola (NYSE:MOT), Nortel Networks
(TSE:NT) and Lucent Technologies (NYSE:LU) as among foreign firms
with CDMA ventures in China.
China's Datang Telecom and Zhongxing Telecom had CDMA
manufacturing capability but for intellectual property reasons
were not authorised to produce the equipment, the paper said.
Lu said that despite a delay in the roll out until next
year there would be no scaling back of its original goal of
setting up a network with initial capacity of two million
lines.
AMBITIOUS NETWORK BUILD-UP PLANS
China Unicom had announced plans in March to begin rolling
out a nationwide CDMA network by the end of this year.
The use of CDMA was seen as giving Unicom a technological
lead over rival China Telecom, which uses the older GSM (Global
System for Mobile Communications) standard that has been
promoted by European firms Ericsson (SWED:LME.B) and Nokia
(HELS:NOK1V) (NYSE:NOK).
But the plan soon bogged down when San Diego-based Qualcomm
(NASDAQ:QCOM), a key CDMA patent holder, and Chinese
telecommunications officials locked horns over royalty fees and
other technology transfer issues, U.S. industry sources said.
The problem was compounded when Sino-U.S. ties plummeted to
to their lowest point in a decade after U.S. bombs destroyed
the Chinese embassy in Yugoslavia during a NATO air strike in
May.
Qualcomm and Beijing have since made some progress in their
dispute, and China Unicom has issued requests for sales
proposals from a dozen CDMA vendors, industry executives said.
RAPID EXPANSION
Unicom executives have said the first phase of the
company's CDMA network, when complete, would handle 2.6 million
users. The company's CDMA plan calls for extending its reach to
10 million users in 250 cities by the end of 2000 and to boost
capacity by 10 million users annually from 2001.
Most Chinese mobile phone users, whose ranks of 35 million
grow by 1.5 million each month, use the GSM standard.
The CDMA transaction was given fresh momentum by the World
Trade Organisation (WTO) pact China and the United States
signed on November 15.
Shortly after the WTO deal, industry sources said Unicom
executives had disclosed plans to have 30 million customers and
close to 40 million subscriber capacity by 2003.
Rival China Telecom and a military-linked firm are already
operating pilot CDMA networks with foreign partners in the
Chinese cities of Beijing, Shanghai, Guangzhou and Xian.
COMPETITION INTRODUCED TO SHAKE UP SECTOR
Several foreign companies have confirmed receiving recent
requests from China Unicom for information on CDMA equipment
and network configurations. Such requests are often the first
step before detailed price quotations and contract bids.
Besides Nortel, Motorola and Lucent, companies known to
have been approached by Unicom include South Korean vendors
Samsung (KOREA:00830) and LG Information and Communications Ltd
(KOREA:11650), and Japan's NEC Corp (TOKYO:6701) and Fujitsu (TOKYO:6702),
industry sources said.
State media reported on Friday that China would complete a
major restructuring of the telecoms industry early next year.
A plan to create separate groups for fixed-line telephone
services, mobile telecommunications, satellite data
transmission and paging services would be in effect next year,
Liu Cai, head of the policy and regulation department at the
Ministry of Information Industry (MII), was quoted as saying.
The core of the plan to revamp a telecoms sector now
dominated by China Telecom would be breaking up the market to
promote competition and transforming MII into a market
regulator without any links to commercial operations, Liu said.
Copyright 1999, Reuters News Service
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