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To: ms.smartest.person who wrote (710)	3/27/2001 7:28:42 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

China Unicom to Spend $2.42 Billion On CDMA-Based National Network March 28, 2001 Tech Center By MATT POTTINGER and H. ASHER BOLANDE Staff Reporters of THE WALL STREET JOURNAL HONG KONG -- China Unicom Group is set to unveil detailed plans Wednesday to build a nationwide CDMA mobile-phone network and invite companies to bid for an estimated US$2.42 billion in contracts, bringing San Diego-based Qualcomm Inc. closer than ever to cracking the key market. State-owned Unicom, parent of the country's No. 2 wireless provider, will formally detail the specifications of several portions of the network for the first time to foreign and domestic equipment makers at a meeting in Beijing, according to executives at three companies who will attend. They added that Unicom has indicated the project, which will use code-division multiple access technology, will be larger than previously announced. In the first year alone, the company aims to inflate its minuscule patchwork of experimental CDMA networks into a unified system with capacity for 13.3 million subscribers, say foreign and Chinese executives familiar with the plan -- with an estimated price tag of 20 billion yuan (US$2.42 billion). "They want to fill the capacity in less than 18 months," said one foreign telecom executive who will attend the meeting. "They are aiming for 50 million [subscribers] in a few years." Companies expected to take part in the meeting include: Canada's Nortel Networks Corp., U.S.-based Lucent Technologies Inc. and Motorola Inc., Sweden's Telefon AB L.M. Ericsson , and LG Electronics Co. and Samsung Electronics Co. of South Korea, in addition to several domestic Chinese companies, according to the executives. Unicom executives couldn't be reached for comment. Analysts expect foreign companies to win a hefty portion of Unicom's contracts, especially in the first round, but top Unicom and government officials have said the CDMA project is intended to benefit domestic equipment makers. Ding Donghua, chief financial officer of Unicom's New York and Hong Kong-listed company, China Unicom Ltd., told a meeting of industry executives in Hong Kong on Tuesday that the parent company would "give preference to local suppliers." The unit, China Unicom Ltd., holds no equity or risk in the CDMA venture, but it will have the option of buying it later if it proves profitable, Unicom Chairman Yang Xianzu has said. The CDMA network will be operated by a newly established subsidiary of the parent called Unicom Horizon. Qualcomm doesn't manufacture CDMA handsets or infrastructure but holds key patents in the technology that entitle it to royalties on every piece of CDMA-related equipment sold in the market. The vast majority of China's 80 million current users connect to networks based on a rival technology known as GSM, or global system for mobile communications. Chinese and foreign executives cautioned that today's meeting, while the most positive sign yet that Unicom is moving forward with CDMA, is still only the first part of a process that will culminate with the awarding of contracts. Just over a year ago Unicom was in the same position when its plans unraveled because of domestic political squabbling and the breakdown of a patent-licensing agreement between Qualcomm and Chinese manufacturers. The CDMA network could end up competing with China Unicom Ltd.'s GSM service in some provinces, as well as posing a challenge to the country's top wireless operator, China Mobile Communications Corp. Write to Matt Pottinger at matt.pottinger@awsj.com1 and H. Asher Bolande hyam.bolande@awsj.com2 -------------------------------------------------------------------------------- URL for this Article: interactive.wsj.com Hyperlinks in this Article: (1) mailto:matt.pottinger@awsj.com (2) mailto:hyam.bolande@awsj.com -------------------------------------------------------------------------------- Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. Printing, distribution, and use of this material is governed by your Subscription Agreement and copyright laws. For information about subscribing, go to wsj.com Used with permission of wsj.com