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To: Sully- who wrote (1920)	2/1/2000 2:37:00 AM
From: Sully-	Read Replies (1) \| Respond to of 35685

China reaches preliminary Qualcomm deal Tuesday February 1, 2:20 am Eastern Time By Matt Pottinger BEIJING, Feb 1, (Reuters) - Qualcomm Inc (NasdaqNM:QCOM - news) has struck a preliminary agreement in Beijing that paves the way for China to build a mobile phone network based on U.S. technology, a Chinese company official said on Tuesday. ``We've basically reached an agreement, but we have yet to formally sign it,' said an official at China Unicom, the country's number two telcommunications carrier, which is negotiating the deal. The deal would cover the licencing of U.S.-standard CDMA mobile phone technology to Chinese manufacturers. Qualcomm holds most of the patents for CDMA technology, and earlier reports on progress in the deal boosted the San Diego company's stock nearly 15 percent in trading on Monday, reversing a steep sell off last week. China Unicom, formally known as China United Telecommunications Corp, has sought for almost a year to roll out CDMA (Code Division Multiple Access) networks to boost its market share against state giant China Telecom. China Telecom, which uses the European GSM (Global System for Mobile Communications) standard, currently claims 90 percent of the country's whopping 40 million mobile phone subscribers. Unicom officials hope CDMA, which makes more efficient use of the airwaves than GSM, will give it a competitive edge against its rival. POLITICS AND PATENTS Unicom was forced to push its CDMA plans onto the back burner for months as government regulators loyal to China Telecom sought to scuttle the plan. Adopting the CDMA standard could translate into big contracts for North American firms like Nortel, Lucent and Motorola. Chinese officials used the issue as a bargaining chip to pressure Washington to reach a market-opening pact last November that paves the way for China to join the World Trade Organisation. Unicom now has to hammer out a framework whereby Chinese manufacturers would pay royalties to Qualcomm in exchange for the right to crank out CDMA equipment, from switches and base stations to handsets. ``We're still discussing the final price for the patents,' the Unicom official said. ``You can get the details once we've formally approved it.' He said a deal will likely be signed after the Chinese New Year holiday, which spans the first half of February. Qualcomm declined to confirm whether a preliminary agreement had been reached. Company spokeswoman Christine Trimble said on Monday: ``We are in negotiations, and good progress has been made.' biz.yahoo.com