To: Dealer who wrote (3709 ) 9/26/2000 8:13:36 AM From: Dealer Read Replies (1) | Respond to of 65232 QCOM--China to let market decide 3G cell phone standards (UPDATE: Adds background, comments of China Unicom, industry analyst) By Matt Pottinger BEIJING, Sept 26 (Reuters) - The Chinese government will let mobile phone companies decide for themselves which technologies they use to provide future-generation services and will not mandate a standard, a senior official said on Tuesday. The comment by Lou Qinjian, vice-minister of the Ministry of Information Industry, is welcome news for foreign equipment vendors worried that Beijing might force the market to adopt a homegrown technology that rivals U.S. and European standards. ``Companies ought to determine it for themselves,'' Lou told Reuters on the sidelines of a conference in Beijing on next-generation wireless technology. ``The Ministry of Information Industry requires only that they choose common international standards,'' he said. ``As for which standard an operator chooses specifically, that is for the market to determine.'' Future, or so-called ``third generation'', wireless technologies, are designed to deliver advanced services to mobile phones, such as high-speed Web access and video conferencing. CHINESE STANDARD HAS TEETH Some markets in Europe and Asia are poised to begin rolling out third-generation phone networks as early as next year, using a patchwork of competing international standards. Rival standards include WCDMA, backed by several European and North American equipment makers, and cdma2000, promoted by U.S.-based Qualcomm Inc (NasdaqNM:QCOM - news). But the Chinese government, with help from Siemens AG of Germany, has cultivated its own technology that is winning recognition in the global telecoms industry: TD-SCDMA. If phone companies decide to adopt TD-SCDMA, state-owned Chinese equipment makers would stand to earn hefty sums in royalties and equipment contracts. In a boost for the standard, equipment vendors Motorola Inc (NYSE:MOT - news) and Nortel Networks (Toronto:NT.TO - news) announced last week they would help China develop and promote TD-SCDMA. While the companies also support other standards, the announcement was a sign that TD-SCDMA has a fighting chance against its rivals, especially in China -- already the world's second largest mobile market with 65 million subscribers. CHINA STILL UP FOR GRABS But TD-SCDMA would also have to attract global interest from mobile service providers if the standard were to have a bright future, said Beijing-based telecoms consultant Patrick Horgan. ``China, while promoting its own standard for 3G, has no desire to be cut off from the rest of the world,'' said Horgan of APCO China. Even if domestic cellular operators were willing to adopt it, Chinese equipment makers would be less interested in the standard if it failed to create an export market, he said. ``If TD-SCDMA is not viable in the global market, it would clip the wings of China's own 3G industry,'' he said. With third-generation service still a few years away in China, domestic operators have yet to commit to -- or reject -- any standard. But it is unlikely a company would choose more than one, raising the prospect of a zero sum game between competing standards, according to an official at number two state-owned phone company, China United Telecommunications Corp. ``I think the possibility is remote that an operator would adopt cdma2000 and WCDMA'' or any other combination, said Zhang Fan, deputy chief engineer at China Unicom.