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To: BDR who wrote (33334)	10/20/2000 7:27:47 PM
From: BDR	Respond to of 54805

News out of China still raises more questions than it answers about QCOM: China Unicom to develop current generation CDMA network October 20, 2000 By CHRISTOPHER BODEEN Associated Press Writer BEIJING (AP) via NewsEdge Corporation - China's No. 2 phone company announced Thursday that it will invest in a wireless network using a U.S. standard, giving American companies a toehold in the European-dominated Chinese mobile market. China United Telecommunications Corp., or Unicom, said it would employ the current generation of CDMA technology developed by Qualcomm Corp., but said the size of the network and its development costs hadn't yet been decided. Wang Jianzhou, company executive vice-president, said the network won't be paid for or initially used by China Unicom Ltd., its publicly listed unit in Hong Kong and New York. The listed company could buy the CDMA network if the venture proves successful, he said. ``The parent company will shoulder all the possible risks that CDMA construction will cost,'' Wang said at a news conference. The announcement furnishes an opportunity for U.S. competition in a rapidly growing market overwhelmingly dominated by the European GSM standard. Yet Unicom's lack of detail about the network's size and timing leaves in doubt exactly how much benefit will go to Qualcomm, which owns key patents for the current version of CDMA, and to other North American equipment makers that back the technology. China has 65 million mobile phone users, the world's second largest market after the U.S. But both Unicom and its much larger competitor, China Mobile Communications Corp. _ the only other company licensed to operate mobile phone systems _ operate systems using GSM technology. Unicom came to CDMA, or Code Division Multiple Access, via a combination of political pressure and business strategy. Keen to build U.S. support for China's entry to the World Trade Organization, Chinese leaders last year began talking up a switch to CDMA and encouraged China Unicom to try the technology. But Unicom balked in recent months, wavering over whether to buy Qualcomm's current CDMA standard or wait for more advanced systems able to carry more data: Qualcomm-backed CDMA 2000, European-backed W-CDMA or a third standard, TD-SCDMA, being developed by a Chinese government institute and Germany's Siemens AG. Wang, the Unicom executive, said the company changed its thinking after the government in July forced it to take over Great Wall Telecom. The military-run company operated CDMA trial networks serving 300,000 subscribers in four cities but was forced to relinquish the ventures under a government divestment program. ``After we take Great Wall's network, we're definitely going to expand it,'' Wang said. He added that the expansion would use current CDMA technology. Analysts, however, have questioned whether venturing into CDMA makes sense in the GSM-dominated market. Unicom, which also provides paging services, also faces knotty problems ranging from massive debt and uncertainty over the viability of its business strategy to simply problems getting subscribers to pay.