USE OF CDMA UNLIKELY - [Wall Street Journal, online.] A Chinese telephone
company slated for one of the country's largest stock listings appears
unlikely to deploy a mobile-phone technology it agreed to license from a
U.S. company. The trouble with the new technology is just one of many
problems that China United Telecommunications, or Unicom as it is widely
known, has faced in recent years. Unicom reached a "framework agreement" in
February with Qualcomm. Unicom was to license Qualcomm's technology, called
CDMA, to build a nationwide mobile-phone network for 10 million subscribers
by the end of this year. The deal would have given Qualcomm access to the
world's third-biggest mobile-phone market. Within a week of the agreement,
however, the Chinese government ordered Unicom to delay its plans. Now, it
appears the deal with Qualcomm is imperiled. The world will move to new,
"third generation" standards in as little as two years, driving the proposed
"second generation" CDMA network toward obsolescence. Critics in China
increasingly argue against building an expensive new system for such a short
period. Even Unicom executives privately doubt the wisdom of building a
CDMA system now, people close to the company say. The government created
Unicom in 1994 to spur competition, which until then was nonexistent. "I
think the Chinese government in the last year or so has given Unicom greater
support than in the past," says Arthur Kobler, president of AT&T China.
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