Telecoms firms to use 3G as springboard into China
The Asahi Shimbun
--------------------------------------------------------------------------------
The companies expect to have greater success than they did with their 2G products.
The nation's telecommunications industry is justifiably proud of its global reputation for cutting-edge technology and pioneering services.
But Japanese companies have failed to walk the talk in China, the world's largest cellphone market.
Not a single Japanese company has won a contract for ground stations, exchange units or other cellphone infrastructure.
As for handsets, NEC Corp. and Panasonic Mobile Communications Co., a subsidiary of Matsushita Electric Industrial Co., each hold a scant market share of 2 percent.
But changes are in the air.
Domestic equipment makers and service providers are going all out to promote their third-generation (3G) hardware and services on the mainland.
China is set to introduce the high-speed, large-capacity mobile communication service as early as this year.
To prepare, NEC, Matsushita and other Japanese telecom heavyweights are holding demonstrations, attending symposiums and setting up joint ventures.
But will they fare any better than they did with the second-generation cellphone network?
Chances are good, largely because last time around, China picked different communication protocols, effectively shutting out the Japanese industry.
For 3G, Beijing plans to adopt two international standards used in Japan, W-CDMA and CDMA2000 1X.
Japan has set the pace in 3G cellphone technologies since October 2001, when NTT DoCoMo Inc. launched the world's first commercial service under the Foma brand.
Armed with compatible technology, Japanese firms will be a front-runner in the chase for customers. Lots of them.
The number of cellphone subscriptions in China stood at 330 million in November, nearly four times the Japanese market.
And there is plenty of room to grow: some 200 million additional subscribers are expected by 2008, according to a government-affiliated body.
Japan's industry badly needs a China comeback. The days of rapid growth in the home market are over. Two-thirds of the population, or about 85 million, have already signed up to cellphone services. Thirty percent of these customers use 3G services.
As the market saturates, cellphone makers face another problem-mounting development costs.
A key selling point of 3G handsets is their ability to send and receive high-quality video, a state-of-the-art technology. It is estimated to cost as much as 10 billion yen to bring out a new model, and this is hurting profits at manufacturers.
If manufacturers can get volume production going in China, they will be able to earn enough to offset their development costs.
In October, NEC opened a demonstration center in Guangzhou, the largest southern city in mainland China, to show off its 3G infrastructure components.
Fujitsu Ltd. has tied up with French telecoms equipment maker Alcatel to promote sales of 3G infrastructure items.
Cosmobic Technology Co., a Shanghai-based joint venture led by NEC and Panasonic Mobile Communications, has started sub-licensing the two Japanese parents' 3G handset technologies to local firms.
DoCoMo and other carriers, which have shared costs to develop 3G handsets with makers, will also benefit if the two 3G protocols currently used in Japan are adopted in China.
Japanese consumers, who will be able to use their 3G handsets in China, could also see prices of the handsets fall as a result of increased production volume.
Of course, this is all conditional on China holding good on its word to endorse W-CDMA and CDMA2000 1X.
As part of its efforts to upgrade China's manufacturing base, Beijing is keen to promote a locally developed 3G standard known as TD-SCDMA.
The two international protocols are expected to have the edge in the Chinese market as well because industry officials say the Chinese-made format is inferior both in voice communication and data transmission performances.
Still, Beijing has already put pressure on Japanese companies to help improve the local standard, citing cooperation offered by Western and South Korean makers.(IHT/Asahi: February 2,2005)
asahi.com |
