China plans to use domestic 3G-CDMA instead of Qualcomm's CDMA
June 1, 2000 By BridgeNews
Shanghai--May 31--The reason for canceling a deal to roll out CDMA (Code Division Mobile Access) technology in mainland China between China Unicom, the country's second largest mobile telecommunications provider, and the U.S. firm Qualcomm Inc. is that China Unicom now intends to use a domestic version of the technology, known as third generation (3G-) CDMA, industry analysts said Wednesday.
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Qualcomm was the sole telecommunications company approved by the government to build and manage a nationwide CDMA network. China signed an agreement with Qualcomm in January, allowing the company to build a CDMA network in China.
But the plan was suspended by the government which said that Unicom needed to provide more information. The plan never materialized and earlier this week China Unicom announced that it no longer intended to cooperate with Qualcomm on building a CDMA network.
However, Unicom is not the only company to have had a CDMA-related project suspended. A 100-million-yuan (US $12.07 million) deal between Japan's Toshiba Corp. and Nanjing Putian Telecommunications Co. to develop and manufacture CDMA mobile phone handsets was also put on indefinite hold in March.
Analysts say the reason was the government does not want to pay such a high price for what is considered to be somewhat antiquated technology.
"According to my information, it seems the agreement will be put off forever, as the government and company do not want to spend so much money on virtually out-of-date technology," Li Yuan, an analyst with the International Data Corporation (IDC).
Li also pointed out that since the third generation CDMA technology will be launched in one or two years, there is no need for Unicom to adopt the current CDMA system.
However, it is not the only reason for China Unicom's decision to step out of the agreement.
"China has been developing its own CDMA system for a long time and recently it made some technical breakthroughs. Therefore, it's possible for the government to cancel the contract with Qualcomm and wait for its own (domestically) developed CDMA system," another Shanghai-based analyst pointed out. |
