To: J.T. who wrote (6527 ) 2/13/2001 9:38:21 AM From: J.T. Respond to of 19219 Great news for QCOM.. QCOM target 110 This from Reuters...China to spend $1.81 bln on CDMA network-paper BEIJING, Feb 13 (Reuters) - China Unicom Group plans to invest 15 billion yuan ($1.81 billion) in building a national mobile phone network that uses Qualcomm Inc's (NasdaqNM:QCOM - news) CDMA technology, a state-published newspaper said on Tuesday. If confirmed, the figure would mark the first concrete projection of the scope of the planned network and paint a clearer picture of the potential profits for U.S.-based Qualcomm and manufacturers of CDMA (code division multiple access) equipment and handsets. The China Daily Business Weekly attributed the figure to Li Zhengmao, executive chairman of Unicom's Hong Kong-listed subsidiary, China Unicom Ltd (NYSE:CHU - news). The money would be used to expand Unicom Group's existing CDMA network from a handful of cities to 160 cities this year with total capacity for 10 million subscribers, the China Daily aricle said. An official at the parent company told Reuters he was unsure whether 15 million yuan was an accurate projection. ``I'm not sure where that figure is coming from, so I cannot say whether or not it is correct,'' said Zhang Fan, general manager of mobile business for Unicom. China Unicom Group announced last October it would build a network based on the standard, using a small CDMA network it subsequently took over from the military as its starting point. Unicom has yet to invite bids from Chinese and overseas equipment vendors for contracts to expand the network. Qualcomm, which pioneered the standard, stands to earn royalties on sales of CDMA equipment and handsets, although it negotiated smaller royalties from Chinese equipment makers than from vendors in other countries as an incentive for China to embrace the standard. Several North American companies, including Nortel Networks Corp (Toronto:NT.TO - news), Lucent Technologies Inc (NYSE:LU - news) and Motorola Inc (NYSE:MOT - news) manufacture CDMA equipment, as do several South Korean, Japanese and Chinese firms. Unicom's listed subsidiary would have the right to take control of the CDMA network if it is profitable, but is not participating in the investments to build the network, company officials have said. China Unicom Group and its subsidiary have a combined 20 million mobile phone subscribers, or about 22 percent of the more than 85 million users in China, with giant rival China Mobile Communications Corp commanding the difference. Practically all Chinese mobile phone networks operate on the GSM (global system for mobile communications) standard -- a rival technology backed by European firms. While GSM dominates most markets, CDMA networks have some advantages: the technology uses airwaves more efficiently and is potentially cheaper to upgrade into future-generation networks capable of high-speed Internet service. ($1 equals 8.277 Yuan) Best Regards, J.T.