You know, once is not enough, tee he he.....
From: Cooters on the Buy Range
China Unicom Vows to Expand Network Using Qualcomm Standard
--From AOL.-- Cooters
Beijing, Sept. 26 (Bloomberg) -- China Unicom Ltd., the country's No. 2 mobile phone service operator, said it will push ahead with plans to take over and expand a cellular network using a U.S. standard developed by San Diego-based Qualcomm Inc.
While no timetable has been set for the takeover, China Unicom will adopt Qualcomm's code division multiple access, or CDMA, standard, Chairman Yang Xianzu told reporters in Beijing this week. The government in June handed China Unicom control of an experimental network based on the CDMA standard from a company called Great Wall Telecoms Co.
``China Unicom has always adopted a positive and practical attitude toward developing CDMA technology in China,'' Yang said. ``Unicom will, of course, restructure and upgrade the technology as well as expand it.''
Yang's statement could mark a reversal for Unicom, which last year called off talks with Qualcomm on using CDMA for the country's No. 2 cellular phone service. The move also comes as China prepares to open the market to several phone technologies to compete with the existing European standard used by most of the country's cellular phone subscribers.
At the same time, however, Qualcomm officials are reluctant to predict what will happen next. ``It's anybody's guess what's happening in China,'' says Steven Sivitz, senior CDMA product manager with Qualcomm. ``We're always reading the newspapers to find out what's going on.''
China is also developing its own standard for so-called third- generation cellular phones, which it has submitted to the International Telecommunications Union, the world's governing body, for acceptance later this year.
China's promotion of its own mobile phone technology and opening of the domestic market to several standards may level the playing field, analysts say.
``The pie is certainly big enough for more than one phone standard in China,'' said Marvin Lo, who tracks phone companies at BNP-Paribas Peregrine Securities Ltd. in Hong Kong. ``Perhaps the government sees that the present capacity is not adequate for future subscriber growth.''
Warring Standards
Unicom already runs the country's second-largest cellular network using a European cellular phone standard called the Global System for Mobile Communications, or GSM. Nearly all of China's 57 million cellular phone subscribers use GSM.
Unicom will eventually gain one million subscribers on Great Wall Telecom's experimental network started by the People's Liberation Army that runs on a 1995 version of Qualcomm's CDMA standard. The network operates in four Chinese cities --Beijing, Shanghai, Xian and Guangzhou.
``We were handed the network,'' said Dun Huang, the general manager of one of Unicom's units. ``What we're going to do with it is a question that our management has to ponder over.''
By opening the market to several standards, the government may be trying to give domestic phone makers an edge over foreign rivals such as Nokia Oyj and Motorola Inc., which make nearly all of the GSM cellular phones sold in China.
Domestic makers such as TCL Communications Equipment Co. have difficulty procuring components, let alone matching the designs and features found in the phones made by bigger foreign rivals.
That may explain the move away from GSM, the dominant standard in China. The Chinese government in August licensed five domestic companies to make CDMA mobile phones. The five companies are Qiao Xing Universal Telephone Inc., Datang Telecom & Technology Co., Zhongxing Telecom Co., China Putian Telecommunications Co. and Huawei Communications Co.
``Our understanding of the government's strategy is that it recognizes telecommunications as a crucial industry, which it wants to remain in the hands of Chinese companies,'' said Jeff Feng, a Qiao Xing spokesman in Guangdong, China.
Standards Raised
In addition to CDMA, China expects to win approval from the ITU this year for a standard it has championed. The so-called TD- SCDMA is likely to evolve into a transmission technology for third- generation mobile phones providing high-speed Internet access.
China developed TD-SCDMA together with Siemens AG, Germany's largest telecommunications company.
Domestic equipment makers licensed to use it may gain an advantage in the local market over foreign firms such as Motorola, Nokia and Ericsson AB.
``What it will mean is that the mobile phone makers will have to manufacture phones which comply with the standard,'' said Bertrand Bidaud, an analyst with market research firm Gartner Group Inc. Siemens also stands to benefit as a mobile phone maker which has spent many years of effort in China, Bidaud says.
For the time being, domestic phone makers such as Qiao Xing see cdma2000, Qualcomm's standard for high-speed mobile access to the Internet, as their chance to gain a foothold in the China market. Qiao Xing is partly owned by Hyundai Electronics Industries Co. of South Korea, one of the world's largest makers of CDMA phones.
``We see CDMA as the opportunity for our company to take off,'' said Qiao Xing's Feng. ``We have been in discussions with both Great Wall and Unicom on supplying CDMA equipment to them.''
In addition to Siemens, Korean companies are also poised to gain a larger share of the mobile phone business in China.
Last week, Unicom Chairman Yang led a nine-person delegation to visit South Korea's Shinsegi Telecom to study the operation of a cdma2000 phone network.
Unicom wants to cooperate with Shinsegi to adopt cdma2000, according to South Korea's Yonhap news agency.
Busy Signal
Government approval for Unicom to operate a CDMA network comes after months of deliberation over which technology it wants to use to expand the country's cellular phone networks for high- speed Internet access.
Unicom's earlier decision not to adopt CDMA in part caused Qualcomm's shares to slump by as much as 67 percent this year, amid concern the San Diego-based firm will fail to gain royalties from Asia's largest and fastest-growing phone market.
While that lack of resolve may appear to be confusion to some, China's government is clearly interested in ensuring that its domestic manufacturers do not miss a chance to enter their own market, which happened in the case of the GSM standard.
``The government has to proceed very cautiously on the next generation of cellular phone technology,'' said Wang Lijian, an official at China's Ministry of Information Industry in Beijing, which regulates the country's phone industry. ``It's not a wrong choice that we'd like to make.''
Sep/25/2000 22:32 ET
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