My take: AmTech report was a simple distillation of an earlier WSJ article (posted as follows). It's perfectly logical that China would attempt to subvert QCOM royalties, given its IP record, so the story is extremely plausible to me. Naturally shorts will want to replay the story. That's the ethics of the street these days.
[FD: No position QCOM; long LU, NT ;-( ]
China Rallies Industry Behind
Domestic 3G Cellular Platform
By H. ASHER BOLANDE
Staff Reporter of THE WALL STREET JOURNAL
HONG KONG -- Beijing is rallying its telecommunications industry behind a homegrown version of third-generation cellular technology known as TD-SCDMA. If the Chinese government decides to favor the Chinese-made technology over rival standards, it could deal a blow to major foreign telecom vendors trying to sell equipment to the world's largest market.
Top-level government officials including Vice Premier Wu Bangguo and representatives of the country's main telecom-equipment manufacturers, financial institutions and its two mobile service providers -- China Mobile Communications Corp. and China United Telecommunications Corp. -- are scheduled to meet Wednesday to establish the TD-SCDMA Industrial Alliance, according to people familiar with the situation.
The meeting's location at the Great Hall of the People, the symbolic heart of state power, underscores the government's support for development of the so-called Chinese 3G technology. By gathering together such high-level representatives, the government is indicating it wants to spur broader efforts across the domestic industry to commercialize TD-SCDMA products.
So far, there are two other standards at large in the world for next-generation wireless networks. One is WCDMA, the choice of European companies and NTT DoCoMo Inc. of Japan. The other is cdma2000, a standard backed by South Korea, and Qualcomm Inc. and Lucent Technologies Inc. of the U.S.
All three standards are incompatible with each other. The standard that becomes dominant will generate billions of dollars for its equipment manufacturers.
With the largest number of mobile subscribers in the world, China will cast a deciding vote on which one of these standards will become dominant.
Foreign telecom companies have a lot at stake. Nokia Corp., for example, which has invested heavily to develop WCDMA products, has been frantically lobbying Beijing to adopt that standard.
TD-SCDMA, a third standard that hasn't been considered anywhere else in the world, could play a spoiler role. With help from Siemens AG of Germany, Chinese state-owned equipment maker Datang Telecom Technology Industry Group has led the research and development work on TD-SCDMA to date.
According to a report in the Friday edition of the Beijing Morning News, an official daily, the state telecom regulator is backing TD-SCDMA and has reserved radio-frequency spectrum exclusively for TD-SCDMA. The spectrum is the crucial infrastructure that allows mobile telecommunications to operate.
-- Matt Pottinger contributed to this article.
Write to H. Asher Bolande at hyam.bolande@wsj.com
Updated October 28, 2002 |
