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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Ruffian who wrote (65303)	1/30/2000 9:32:00 PM
From: LBstocks	Read Replies (2) \| Respond to of 152472

WSJ(1/31): Qualcomm Deal May Set Wireless Standard In China Dow Jones News Service ~ January 30, 2000 ~ 8:16 pm EST By Matt Forney Staff Reporter of The Wall Street Journal BEIJING - Qualcomm Inc. is closing in on a licensing deal that could set a new technology standard for China's huge wireless-communications market. Executives from Qualcomm, the San Diego company that holds many patents for the mobile-phone technology prevalent in the U.S., met Thursday and into the weekend with officials of China United Telecommunications Corp., or China Unicom, the country's second-biggest telephone company. Qualcomm is anxious to conclude a deal in the hope that expanding into China will ensure that its technology remains dominant. "Good progress has been made in our negotiations," said Louis Lupin, senior vice president of Qualcomm, who added that "both companies are pleased with the progress." He declined to say whether a deal had been reached. China has emerged as a hot spot for competition among makers of wireless- communications technology. The country had 43 million mobile-phone users last year, and expects the number to climb to 70 million this year. The technology standard China adopts could swing other countries in Asia toward that standard. At issue is a wireless technology called CDMA, which is widely used in the U.S. Nearly all mobile phones in China, however, use GSM, a standard prevalent in Europe. Last February, Chinese negotiators finally gave in to pressure from Washington and agreed to launch a mobile network based on CDMA technology, which could create more business opportunities for U.S. companies. But a new network still hasn't been built because the Chinese ministry that oversees telecommunications couldn't reach an agreement with Qualcomm, which invented most CDMA technology and demands expensive licensing fees from those that deploy it. After negotiating for months, the Chinese government withdrew from talks in December and ordered China Unicom to strike a deal. The most recent talks are the most substantive since then and have raised hopes that a deal will be struck soon. "I think we'll have an agreement around the Lunar New Year," which falls on Feb. 5, an official close to the talks said. Qualcomm's usual fee is between 5% and 10% of the revenue a licensee earns from its products, but China Unicom has been trying to drive that down, arguing it deserves a discount because the market here is far bigger than in most countries. Qualcomm is concerned that if China receives a price break, Korean and Japanese companies will want lower prices, too. Both sides have much at stake. Qualcomm, which saw its stock price jump last year, may face a threat from a new type of technology for which it holds fewer patents. For China Unicom, the long delay has cost it market share to China Telecom, the former government monopoly that uses the European standard. Unicom hopes to use CDMA as a selling point to reduce China Telecom's market share of more than 90% of mobile-phone subscribers. Also, China Unicom plans to list its shares overseas for the first time this year, and would like a CDMA deal in hand first. Yet China Unicom has been unable to negotiate with a free hand, since whatever agreement it reaches still would require government approval. (END) DOW JONES NEWS 01-30-00 08:16 PM