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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (2903)	3/18/2004 1:14:13 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China's 3G equipment and handset markets both to exceed USD 60 bln by 2005 Beijing. (Interfax-China) - The market value of China's third generation (3G) network equipment industry and 3G handset industry will both exceed RMB 500 bln (USD 60 bln) once the 3G ball gets rolling in 2005, Wu Wei, a CCID analyst focusing on the telecom sector, told Interfax in an interview. CCID is a research firm under China's Ministry of Information Industry (MII). According Wu, 3G investment in 2004 will be zero, as 3G is not expected to be launched this year. In 2005, however, Wu forecast that investment in 3G equipment would reach RMB 43 bln (USD 5.2 bln). Investments in 3G network equipment in 2006, 2007 and 2008 are projected to hit RMB 50.8 bln (USD 6.1 bln), RMB 40 bln (USD 4.8 bln) and RMB 39.5 bln (USD 4.77 bln), respectively. "Due to the fact that 3G did not kick off in China in 2004, as expected, the development of China's mobile equipment market slowed down in 2004," Wu said. "But we expect that 3G will kick off in 2005. Once 3G starts, China's total 3G equipment sales, including services accompanying these sales, will reach RMB 500 bln (USD 60 bln), as will the 3G handset market." Wu additionally noted that foreign equipment makers were allocating more resources towards 3G research in China. Nortel will strengthen its research in China in the next three years with investments worth a total of USD 200 mln, according to Wu. Siemens has increased its investment in 3G research in Shanghai by USD 30 mln. Alcatel plans to invest USD 45 mln in China to establish a new 3G application development department, while Lucent's total investment in the company's Nanjing research center is now USD 50 mln, Wu noted. "These investments are being used for research and development, but the majority is being used for 3G equipment research and development," added Wu. "These multinational telecom equipment giants are increasing their investment in China because of China's huge market." Wu also highlighted the growing role Chinese equipment makers were playing in overseas 3G markets. Huawei has secured 3G equipment contracts with Hong Kong-based Sunny and Emirates Telecommunications Corporation of the United Arab Emirates. ZTE, meanwhile, has signed an agreement to build a national next generation network (NGN) in Romania, a metropolitan backbone network in Hong Kong, and a special railway network for Vietnam. "ZTE's total overseas GSM equipment sales topped USD 150 mln in 2003," Wu added. Wu also believed that a slow down in network expansion during 2003 would help operators to save money in preparation for 3G. "China Mobile's investment in network expansion in 2003 was RMB 60.5 bln (USD 7.2 bln), down 6.8% as compared to 2002. The main reason for shrinking investments is a reduction in GSM network construction," Wu said. "China's GSM network expansion in 2003 was far less than in previous years. Many of China Mobile's subsidiaries have seen that their current GSM network capacity is sufficient and have therefore been preparing money for 3G development." Wu also believed that network optimization and after-construction services were become increasingly profitable areas for equipment providers. "Investments by Chinese telecom carriers in network optimization will reach RMB 8.2 bln (USD 1 bln) in 2004," Wu predicted. interfax.com