might not be so ready to add QCOM a/h, Beijing wants to delay wireless deal and use as a bargaining ploy:
DJN: AWSJ:China/Postpones/CDMA -2: Seen As Political Move
By MATT FORNEY
Staff Reporter
BEIJING (Dow Jones)--Less than a week after China announced it would deploy
a new type of mobile communications relying heavily on U.S. technology, the
government has postponed the process indefinitely.
The delay order, which hasn't been made public, stunned foreign firms, some
of which had already bid on the project that would build a national
mobile-phone network. Executives at several multinational companies say
their bids to supply equipment aren't being accepted. Some speculate the
move is a bargaining tactic as the U.S. Congress prepares to debate whether
to support China's entry into the World Trade Organization.
"We've been told that our discussions will be delayed," said Michael Ricks,
president of Ericsson China Co., a subsidiary of Telefon AB L.M. Ericsson,
the Swedish telecom giant. He said officials from the Chinese operator of
the planned network told him the order had come from the government.
"There's no commercial reason why that would be, so that leaves political,"
Mr. Ricks said.
China's second-biggest phone company, China United Telecommunications Corp.,
or China Unicom, announced last week that it would build a mobile network
using CDMA, or code division multiple access, technology licensed from
Qualcomm Corp. of the U.S. Many big technology companies had cheered the
move, which promised lucrative supply contracts in one of the world's
fastest-growing mobile-phone markets.
While it is highly unlikely the delay will be permanent, the confusion
underscores the heavily politicized nature of CDMA, which has been a
bargaining chip over the past year in China's WTO negotiations with the U.S.
Some observers also think Chinese leaders are unhappy with the deal that
Qualcomm struck with China Unicom and will try to rewrite the terms of the
agreement. The biggest loser at this point: China Unicom, whose impending
listing of shares overseas could be complicated by the change of plan. A
spokesman for China Unicom said he was unaware of the delays.
The move is sowing confusion in other quarters. Lucent Technologies (China)
Co. is going ahead today with discussions with China Unicom about a
commercial bid, according to spokesman H.T. Kung. Motorola China Electronics
Co., which had planned to bid next week to supply the new network, has
dropped the idea for now, according to a company official. The postponement
has even affected the People's Liberation Army, China's military, which
partly owns a small commercial CDMA network. The PLA canceled meetings this
week in which it was to discuss expansion of its network, according to
Ericsson's Mr. Ricks.
"We'll have to wait and see what happens," says Leo Zhang, Qualcomm's
general manager in China. He says he canceled a previously scheduled trip to
company headquarters in San Diego this week after learning of the
postponement.
(END) DOW JONES NEWS 02-23-00
06:30 PM |
