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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Anonymous who wrote (6765)	3/23/1999 9:21:00 AM
From: KYA27	Respond to of 21876

China tipped to open a line to U.S. telecom firms By Matt Pottinger Tuesday March 23, 3:45 am Eastern Time BEIJING, March 23 (Reuters) - China appears ready to bow to strong U.S. trade pressure and embrace a cellular telecommunications standard worth billions of dollars to U.S. companies such as Motorola and Lucent Technologies. Foreign equipment manufacturers said on Tuesday that Chinese companies had expressed strong and sudden interest in buying CDMA networks -- a leading U.S. standard. CDMA (Code Division Multiple Access) is limited to trials in four cities, while the rest of China operates on the European GSM (Global System for Mobile Communications) standard. Industry analysts said an announcement on CDMA could come next month during Premier Zhu Rongji's visit to the United States. Zhu is thought to back CDMA as part of his efforts to spur competition in an industry dominated by state-owned China Telecom. A concession to U.S. telecommunications firms could help China's bid to join the World Trade Organisation, but Beijing has so far made no public comment on the issue. ''In the last several days we've had a flurry of activity'' on possible bids, said a Beijing-based executive at one of the foreign companies. ''They're not real tenders yet, but inquiries from our customers,'' he said. Other firms also reported approaches from customers allied with China Unicom, a tiny state-owned rival to China Telecom. Equipment manufacturers which stand to benefit include U.S.-based Lucent Technologies (NYSE:LU - news) and Motorola (NYSE:MOT - news), Canada's Nortel (Toronto:NTL.TO - news) and South Korea's Samsung [SAGR.CN]. It would also be a windfall for San Diego-based Qualcomm Inc. (Nasdaq:QCOM - news), which developed CDMA technology and stands to earn high royalties on equipment and handsets. Motorola has seen its once dominant share of the Chinese mobile market eroded by competition from European rivals, including Ericsson and Nokia . A Chinese move to CDMA could help revive its fortunes in the world's fastest-growing telecommunications market. In 1997 Beijing offered foreign vendors CDMA trials in Beijing, Shanghai, Xi'an and Guangzhou in partnership with local venture Great Wall. But approval for expansion into other cities and sales to other Chinese customers have remained elusive. Foreign executives said interest in CDMA intensified this month after China Unicom submitted a plan to the State Council, or cabinet, to help it compete with China Telecom. The plan calls for two million CDMA subscribers this year, 10 million next year and 40 million in five years. It is thought to have received Zhu's blessing, according to foreign industry executives who cite Chinese official sources. One foreign executive estimated total market sales of more than $16 billion if Unicom were to realise its five-year goal. The Ministry of Information Industries, China Unicom and Great Wall declined to comment on the issue. ''No official is willing to confirm it. But personally I believe it is coming,'' said an executive with a foreign company. ''If there's going to be any announcement, it will be during Zhu Rongji's visit to the U.S.,'' said another. Jay Hu, director of the U.S. Information Technology Office, which represents U.S. telecom firms in Beijing, played down a link between CDMA and China's 13-year quest to join the WTO. ''I don't think there's a strong linkage between CDMA and the WTO, but rather CDMA is linked to the trade deficit,'' he said. Last year, China's trade surplus with the United States was $57 billion, according to the U.S. Department of Commerce.