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To: gdichaz who wrote (3457)	1/31/2000 7:25:00 PM
From: Ruffian	Read Replies (1) \| Respond to of 34857

AWSJ: China Unicom, Qualcomm Settle On Preliminary Deal Dow Jones News Service ~ January 31, 2000 ~ 6:00 pm EST By Matt Forney Staff Reporter BEIJING - Qualcomm Inc. has reached an agreement with China United Telecommunications Corp. to license and deploy Qualcomm's technology in China's fast-growing mobile communications market. The deal was struck during negotiations over the weekend, but neither Qualcom nor China Unicom has been willing to confirm the agreement, which is still preliminary and must be approved by several Chinese agencies in a process that could take several weeks. If accepted, the agreement would give China Unicom a mobile-phone technology called CDMA, or code-division multiple access, a standard Qualcomm developed that has become the dominant in the U.S. China Unicom will be able to use the technology as a new selling point in its battle to lure customers away from China's main operator of mobile communications networks, China Telecom. Around 90% of China's 43 million mobile-phone users subscribe to China Telecom's service, which uses the GSM, or Global System for Mobile communications, wireless technology that is prevalent in Europe. "Now we move to the approval process," says a participant in the negotiations. "There are almost no issues left - we agreed, but there is no contract yet," the negotiator added. The deal must be approved by the State Development Planning Commission and the Ministry of Information Industry, among others. The deal lets China Unicom license a technology called cdmaOne from Qualcomm, the San Diego-based company that holds many patents for mobile-phone technology. Qualcomm will collect a royalty fee for sales of equipment using its patents, such as wireless handsets and ground stations. The deal could affect the development of mobile-phone standards in Asia, where a large market such as China may influence regional industry trends. China Unicom has licensed the so-called second-generation cdmaOne. Many companies are furiously working on third generation wireless technology, which will enable users to download video and other products to handheld devices, such as mobile phones. That next generation is still a few years away, but already companies are vying to set the industry standard. One option - called wide band CDMA - is prevalent in Europe. Qualcomm holds relatively few patents for this type of CDMA technology. Another option Qulacom is developing is called CDMA 2000. With its latest deal in China, Qualcomm stands a better chance in the future of convincing China Unicom to upgrade to CDMA 2000. (END) DOW JONES NEWS 01-31-00 06:00 PM