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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: foundation who wrote (3268)	9/27/2000 11:24:19 AM
From: LJM	Read Replies (2) \| Respond to of 197519

(Adds quotes from Li, background of 3G mobile phone battle) By Matt Pottinger BEIJING, Sept 27 (Reuters) - China will license its telephone companies to build trial cell phone networks early next year using a domestic technology that challenges standards backed by Europe and Qualcomm Inc <QCOM.O>, the inventor said on Wednesday. If confirmed, the policy might encourage Chinese phone companies to favour the home-grown technology, called TD-SCDMA, over Europe's WCDMA standard and U.S. Qualcomm's cdma2000. China's state-owned telecommunications equipment makers stand to earn billions of dollars if TD-SCDMA, designed to deliver the Internet and video to mobile phones, is adopted widely. "China Telecom, China Mobile and China Unicom will be allowed to build trial networks in the second quarter," Li Shihe, chief engineer at the China Academy of Telecommunications Technology, told Reuters in an interview. "The policy will be announced by the Ministry of Information Industry very soon," Li said. An official at the ministry, which regulates telecoms, declined to confirm or deny that licences would be issued, saying any new policies would be announced in state-run media. STATE BACKING FOR STANDARD Only a day earlier, the ministry's vice-minister Lou Qinjian told Reuters the government would leave it to phone companies to decide for themselves which technologies they adopt for future mobile services, and would not impose a standard. Li, who heads the state-funded project to develop TD-SCDMA, backed that statement, saying trials would not be mandatory. But by offering licences for TD-SCDMA trials before foreign technology trials, the government would be sending a strong signal to the industry, which is almost entirely state-owned. The China Academy of Telecommunications Technology where Li works was only recently spun off from the Ministry of Information Industry. It has 500 million yuan ($60 million) in state funds to develop TD-SCDMA and holds a 48 percent stake in state equipment maker Datang Telecom <600198.SS>, Li said. China's three phone companies, China Mobile, China Unicom and China Telecom, are also state-owned. None has indicated which standards it will adopt for future mobile service. DARKHORSE NO LONGER Politics aside, Li said TD-SCDMA stands on its technical merits alone. Until recently a darkhorse technology, he and his team of 200 engineers have managed to push TD-SCDMA out from the shadow of its foreign rivals. Flaws that once marked it as doomed, such as a tendency to lose its signal in fast-moving cars, have been worked out, he said. "It's not a problem now," he said. He said TD-SCDMA also had a key advantage over WCDMA and cdma2000: it can use the airwaves more flexibly, making its service faster and cheaper. While handsets on the foreign standards will use equal amounts of precious spectrum for uploading and downloading, TD-SCDMA can allocate all its spectrum to one or the other in the wink of an eye -- an advantage when surfing the Internet. North American equipment makers Motorola Inc <MOT.N> and Nortel Networks <NT.TO> announced last week they would help promote the technology, while also supporting the foreign standards. And Li said U.S. giant AT&T had expressed interest in conducting trials. AT&T was not available for comment. Li dismissed the idea that TD-SCDMA would monopolise the Chinese market, saying other technologies, and WCDMA in particular, would be rolled out "in parallel." ($1=8.279 Yuan) REUTERS Rtr 07:27 09-27-00 //Begin Meta Data// Selector Code: reutr Copyright 2000, Reuters News Service