News--The Post: <font color=red>"China Unicom to Use CDMA"
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>>>China Unicom to Use CDMA
By Matt Pottinger
Reuters
Monday , October 16, 2000; 3:25 AM
China Unicom, the country's second biggest mobile phone firm, will use CDMA technology from Qualcomm Inc to build a narrow-band mobile phone network in China, a senior Unicom Official said on Monday.
"We will definitely build a narrow-band network, definitely," said Zhang Fan, chief of China Unicom's mobile communications department, ahead of a news conference by Qualcomm and a Chinese company to unveil a CDMA (code division multiple access) mobile phone.
Fang told Reuters that Unicom would build a narrow-band network, in addition to expanding trial CDMA networks it is scheduled to acquire, once it had formal government approval.
The decision is significant for Qualcomm.
The U.S. wireless technology firm has been trying for years to convince China to build mobile phone networks using its CDMA technology, the foundation for future mobile networks that promise high-speed Internet and video conferencing on handsets.
Fang spoke ahead of a news conference where Qualcomm and Chinese phone maker ZTE Corp were to unveil a CDMA mobile phone for Chinese buyers which also marked a step forward for Qualcomm in the difficult-to-crack Chinese market.
The deal with state-owned ZTE to make CDMA phones was a positive sign for the technology in what is already the world's second biggest mobile phone market, after the United States.
"If a Chinese manufacturer is putting in so much money into this, they must feel positive about the future development of CDMA in this country," a Qualcomm executive said.
Qualcomm sells CDMA chipsets to handset manufacturers and earns royalites on each handset or piece of CDMA network equipment sold around the globe.
The company had scored a hard-won agreement earlier this year in which China Unicom agreed to build a CDMA network with a capacity for more than 10 million subscribers.
But the deal unravelled, helping throw Qualcomm's share price into a tailspin. Its stock traded at $69 15/16 at the end of last week, far off its all time high of almost $180 in January.
Qualcomm shifted its strategy from lobbying phone carriers to courting Chinese telecoms equipment makers, including Shenzhen-based ZTE Corp, which is also known as Shenzhen Zhongxing Telecom Co Ltd.
It struck deals to lease its technology or provide chipsets to a dozen Chinese firms, encouraging them to design and manufacture CDMA goods.
The ZTE model is the first CDMA phone in the world containing a Subscriber Identification Module, or "SIM card," the Qualcomm executive said.
SIM cards, about the size of a thumbnail, can be moved from handset to handset, allowing subscribers to switch phones without losing their original phone number and service plan.
CDMA phones sold in other markets have permanent phone numbers, a potentially fatal inconvenience in China, where many consumers switch handsets almost as fast as they change hats.
Earlier this month, Qualcomm chief Executive Irwin Jacobs met Chinese Premier Zhu Rongji and senior Chinese telecoms officials in Beijing on CDMA.
Qualcomm was hopeful Unicom would build a large CDMA network by the end of the year, Jacobs told Reuters after that meeting.
Such a network would boost dramatically Qualcomm's sales for the next two years, he said.
While the CDMA standard is used in North America and in a handful of Asian countries such as South Korea, it has made few inroads in China—which has 65 million subscribers.
Only a handful of Chinese cities have CDMA networks, with only about 200,000 users. The vast majority of networks use the European GSM (global system for mobile communications) standard.
GSM is used far more widely around the globe than CDMA, making it an attractive option for customers since it allows them to roam from country to country using the same phone.
But CDMA uses the airwaves more efficiently than GSM, making it useful in crowded markets like China's.
© 2000 Reuters <<< |
