LU says missing out on Chinese business,NOK will benefit
07:31 AM ET 08/30/00
INTERVIEW-Lucent says missing out on Chinese business
HONG KONG, Aug 30 (Reuters) - Lucent Technologies is
missing out on significant revenue opportunity in China because
of the country's adherence to the European GSM wireless telecoms
standard, Mike Butcher, Lucent's president for international
operations, said in an interview on Wednesday.
Butcher said that half the telecoms spending in the world's
most populous nation right now is on mobile equipment, as the
country furiously builds out its wireless network.
"We get precious little of that, the reason being because
China is GSM, and Lucent was very late getting into the GSM
technology," he said. "Our percentage market share is very low."
But, Butcher said, that growth inhibitor also presents a big
opportunity for Lucent.
Butcher said he is hopeful that China ultimately approves
CDMA (code division multiple access) technology for current
generation wireless technology. Beijing-backed China Unicom
Ltd's <0762.HK> on-again/off-again deliberation earlier this
year over whether to use the CDMA standard, developed by
U.S.-based Qualcomm Corp , helped send Qualcomm stock
reeling.
But the fate of CDMA in China remains undetermined.
Butcher said CDMA, which is the basis for all
third-generation (3G) wireless networks, is preferable to GSM
because it can be more easily upgraded to 3G.
"We're still waiting and we're pushing for it to happen," he
said.
Butcher said China Unicom, China's number-two wireless
carrier, began pushing the government for CDMA approval two
years ago. "As time's gone on and it hasn't happened, and
they've installed more GSM networks themselves, then you're
getting into this confused area."
While Lucent also makes GSM network equipment, Butcher said
China's huge embedded base of networks supplied by European
firms makes it difficult for Lucent to penetrate. "Most of them
are upgrade contracts," he said.
Still, China is Lucent's largest single-country revenue
source outside North America, thanks to its wireline business,
which this year will install about 4 million phone lines,
Butcher said. A total of 20 million lines were installed in
China last year, he said.
Butcher declined to provide revenue figures for the
company's China business, which includes about 15 joint ventures
and 3,500 employees. Overall, the Asia-Pacific region accounts
for about US$3 billion to $4 billion in revenue for Lucent,
which posted revenue last year of US$38 billion.
"If China's growing for us at 20 percent a year plus,
compounded, then we'd be happy," he said.
((Tony Munroe, Hong Kong newsroom +852 2843-6358; fax +852
2845-0636 hongkong.newsroom@reuters.com)) |
