Siemens to invest $1.5 bln in Asia
By Vivian Chu, CBS.MarketWatch.com
Last Update: 3:03 AM ET Jun 27, 2000 NewsWatch
Latest headlines
HONG KONG (CBS.MW) - German electronics giant Siemens said it will invest $1.5 billion in Asia over the next three years, in its biggest-ever investment in the region.
The investment will be plowed into marketing, research and development, and production facilities in mobile communications, said Rudi Lamprecht, president of Siemens Information and Communication Mobile Group at a press conference in Beijing.
Roughly $1 billion of the total investment will be spent in China, which Siemens believes will have Asia?s biggest market for mobile business solutions.
Siemens (SMAWY: news, msgs) is already one of the biggest telecom players in China, where it derives 40 percent of its telecommunications infrastructure business. The company employs roughly 20,000 people and has capital investments close to $500 million, according to the South China Morning Post.
The company also announced that it plans to roll out a new mobile phone technology in China called Time Division Synchronous Code Division Multiple Access (TD-SCDMA), which it has jointly developed with the Chinese Academy of Telecommunications Technology (CATT), a government-backed think tank.
Trials of TD-SCDMA systems with Chinese mobile operators will start early next year, and commercial systems will be available at the end of 2001, the company said in a statement.
Siemen?s investment in TD-SCDMA could be bad news for other telecom players in China such as Ericcson, Nokia and Qualcomm, since it could become the standard for third generation (3G) mobile phones.
Siemens developed TD-SCDMA in secret with CATT, which is backed by China?s Ministry of Information Industry, reported the Financial Times on Tuesday. Once it becomes available, Siemens hopes that Chinese companies will favor a homegrown 3G standard over that of foreign players.
TD-SCDMA is one of three main types of transmission technology for 3G mobile communications. The other two technologies--UMTS and CDMA 2000--are the next-generation versions of the current GSM and CDMA standards, respectively.
Qualcomm (QCOM: news, msgs), which pioneered the CDMA technology that is widely used in the U.S., and Nokia (NOKBF: news, msgs) and Ericsson (ERICY: news, msgs), which use the GSM standard in Europe, are all competing to deploy their respective networks in China. China?s mobile penetration rate is only 5 percent out of a population of 1.2 billion.
The mainland is set to be the biggest battleground for global telecom players in the next few years, as it has not yet committed to a single mobile standard.
But Siemens has the key advantage of working with the powerful Ministry of Information Industry, which not only regulates China?s telecom and Internet sectors, but also is the ultimate parent of China Telecom (CHL: news, msgs) and China Unicom (CHU: news, msgs), the mainland?s biggest telecom firms.
cbs.marketwatch.com |
