Qualcomm in Talks for 3G Deals
biz.yahoo.com
Wednesday November 13, 4:44 am ET
By Doug Young
HONG KONG (Reuters) - Qualcomm Corp (NasdaqNM:QCOM - News), whose technology is the basis for a wireless phone network launched in China earlier this year, is in talks to bring its next-generation systems to Hong Kong and Taiwan, the firm's top China executive said on Wednesday.
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Qualcomm's bid to bring its CDMA wireless standard to Taiwan and Hong Kong is part of a larger recent push by the company in greater China.
Six months ago Qualcomm coaxed its former president Rich Sulpizio out of retirement to head its China operations after China's new CDMA network there got off to a sluggish start.
Sulpizio told Reuters that two wireless phone carriers, one in Taiwan and one in Hong Kong, are talking with Qualcomm about adopting the San Diego-based company's CDMA2000 standard for their future third-generation (3G) systems.
CDMA2000's primary rival is WCDMA, also known as UMTS, whose main backers include European telecoms gear giants such as Ericsson (Stockholm:ERICb.ST - News) and Nokia (HKSE:NOK1V.HK - News).
While western European carriers have committed to WCDMA as their 3G standard, some Asian carriers, including China's two cellular giants, have not yet chosen a 3G technology.
Sulpizio declined to name the companies in Taiwan and Hong Kong that Qualcomm is targeting.
Most carriers in Asia currently use the rival European-developed GSM standard for their second-generation networks, although some have not yet committed to which standard they will use for 3G service that promises high-speed mobile Internet access.
In Taiwan, CDMA2000 candidates are the three companies that now hold 3G licenses, Chunghwa Telecom (Taiwan:2412.TW - News), Far Eastone (Taiwan OTC:4904.TWO - News) and Taiwan Cellular (Taiwan:3045.TW - News). Hong Kong has six wireless phone carriers, four of which have 3G licenses.
In Hong Kong, the territory's number two carrier CSL might be the most likely carrier to pick Qualcomm's standard, given that its parent, Australia's Telstra Corp (Australia:TLS.AX - News), said last month it is seriously considering CDMA2000 for its 3G network, one observer said.
"We're in between preliminary and advanced talks with one Taiwan carrier," Sulpizio told Reuters in a phone interview from Beijing, where he has been based since late May.
"We're (also) having some serious discussions with one in Hong Kong... I don't expect anything real soon. That's part of the whole business development cycle -- it takes time."
In the last six months, the firm has more than doubled the size of its main office in Beijing to about 75 managers and engineers. It also opened an office in Shanghai last month, and plans to open one in Guangzhou by year end, Sulpizio said.
"It's a strategic decision," he said. "Early in the summer, Irwin (Jacobs, Qualcomm's chief executive officer) thought we ought to do more. So... he called me up and said, 'Would you like to live in China for a while?"'
Much of the added manpower is being used to assist in the build-out and upgrade of a CDMA network launched in China earlier this year by the country's No. 2 wireless phone carrier, the parent of Hong Kong-listed China Unicom (HKSE:0762.HK - News).
The Unicom CDMA network -- the adoption of which came after hard lobbying by both Qualcomm and the U.S. government -- got off to a slow start after its launch, but has recently gained momentum.
"Having a lot of knowledge on CDMA (for Unicom) is what we're trying to do," Sulpizio said. "It's a learning curve. We're doing classes and training engineers... We're just trying to raise the whole level of CDMA knowledge."
Unicom's parent said its system had about four million subscribers at the end of September. Sulpizio said the number has grown rapidly since then and is now closer to five million.
He said he believes the company's stated goal of seven million subscribers, which appeared unattainable at mid-year, now looks reachable by year end. "I think next year they'll probably double that," he added.
ABN Amro telecoms analyst Joe Locke said the jury is still largely out on which 3G standard wireless phone companies in China, Hong Kong and Taiwan will adopt. He said WCDMA may have a slight edge because most carriers in those markets now use GSM.
"The bigger issue is what happens with Unicom's CDMA network and how successful that network ends up being" in China, he said. "We haven't seen what the economics there are. This could be good, or it could be a problem." |
