Korean Firms Set Sights on Growing Chinese Telecom Market
Korean telecommunications equipment manufacturers have been stepping up efforts to get a leg up on entering the Chinese market. The telecommunications market there is potentially the world¡¯s largest, and the Chinese government is expected to build an American-style synchronous CDMA network capable of supporting 75 million subscribers by 2004. Korean industry sources anticipate an official announcement from China of a decision to go with CDMA technology by the end of this year.
Top executives of major Chinese telecommunications equipment makers and service providers, including China Unicom, which has been spearheading the introduction of CDMA technology into China, visited Korea last week to discuss concrete steps to move ahead with the introduction of CDMA, which is the standard currently used in Korea. During their visit, representatives of these firms met with Minister of Information and Communication Ahn Byung-yub and heads of major telecommunications service providers and equipment manufacturers such as SK Telecom, Samsung and LG. Chinese premier Zhu Rongji, who is due to visit Seoul to participate in ASEM in October, is expected to announce China¡¯s official decision on the introduction of CDMA technology at that time. Ahn said that he understands that the Chinese government has decided to opt for synchronous technology, adding that mobile telecommunications services would be launched in China in the first half of 2001.
China had 62 million subscribers to mobile telecommunications services as of July and Korean observers estimate that this number will grow to 75 million before the end of this year and further to 180 million in 2002. Out of the current 62 million subscribers, only about 350,000 currently use CDMA technology. China Unicom plans, however, to expand the CDMA service network in China, and Korean observers estimate that demand for additional equipment will reach US$7.5 billion for system operations equipment and US$25 billion for mobile phones.
Meanwhile, Korean telecommunications equipment firms such as Samsung Electronics, LG Electronics and Hyundai Electronics have been taking steps to penetrate the Chinese market by entering into partnerships with local firms. Samsung Electronics, for instance, will set up a telecommunications research center in Beijing in October and just last week, Korea¡¯s top telecommunications service provider SK Telecom signed a comprehensive joint management contract with China Unicom.
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