Korean firms rush to Chinese CDMA market
In anticipation of an international bidding for system equipment manufacturers to be held by
China Unicom, Korean electronics companies are jostling position in the booming Chinese
CDMA (code division multiple access) market.
China Unicom, a state-run telecom operator and the nation's second largest wireless carrier,
plans to open a CDMA network covering 200 cities and handling about 13.3 million
subscribers this October.
The network, once opened, is to be expanded to attract 17 million subscribers by 2002 and
20 million by 2003, according to the Chinese firm.
As of the end of last year, China claims some 80 million users of GSM (global system for
mobile communication) mode mobile phones, the sort widely used in Europe.
Korean electronics companies expect that China Unicom will hold the first bidding to select
system integrators and equipment providers later this month or early April.
Currently, China Unicom is receiving presentations on equipment standards from 12
prospective bidders, and has already established a subsidiary company to take charge of the
CDMA project. The operator is expected to complete the design of the nationwide CDMA
network by the end of this month.
The bidding will be to choose providers of CDMA systems that covering 120 cities in 14
provinces. Several companies will be selected to establish systems in each province.
The total value of the bidding is estimated at $1.56 billion. In addition, about $2.41 billion worth
of handsets will be provided for the project.
Bidders chosen to service large provinces will be granted the right to lay millions of telecom
lines, while those selected for small provinces will be able to lay hundreds of thousands of
lines, according to industry insiders.
The Chinese government is allowing only joint ventures between domestic and foreign
companies to participate in the bidding to facilitate technology transfer and protect local
industries.
Last November, the Chinese government selected 12 joint-venture companies as eligible
bidders, including Shanghai Bell, who partnered with Samsung Electronics, and Capitel
Group, a subsidiary of PTIC (China National Posts & Telecommunications Industry
Corporation), which teamed up with LG Electronics.
LGE had sealed a contract to establish a joint venture with another Chinese company in
February last year but formed the new partnership at the end of last month after its former
partner broke the contract saying that it had developed its own CDMA commercial system.
Watchers say that Shanghai Bell is highly likely to win the bidding, while Capital Group stands
a 50 percent chance to be selected.
In addition, the two Korean companies are expected to supply part of their systems to a large
Chinese telecom equipment manufacturer under an OEM (original equipment manufacturing)
contract.
The domestic industry also expects small- and medium-sized enterprises to advance into the
Chinese market to supply amplifiers, repeaters and antennas.
The Ministry of Information and Communication predicted that at the upcoming bidding,
Samsung will secure a 20 to 30 percent market share in the base station equipment sector.
Korean firms as a whole are expected to take a combined 40 to 50 percent market share.
(hsshine@koreaherald.co.kr)
"By 2004, Chinese CDMA users are expected to grow to 59.5 million, the value of the
equipment market is to rise to $5.3 billion with the sales of handsets increasing to 42.80
million units," said an official. "So the government plans to extend full support to domestic
companies advancing into the fast-growing Chinese market."
(hsshine@koreaherald.co.kr)
By Shin Hye-son Staff reporter
2001.03.16
koreaherald.co.kr |
