Tero,
Read this one. It is exactly the argument point you have on CHINA's selection of CDMA. Especially, from Nokia and ErICY's people. Did you get any tips from ERICY and Nokia? Something like it does not work commercially, GSM is leading on everything and everywhere in China, the plan is crazy, and where can they get money, no Chinese can install those networks, and GSM is good , too late to the market, etc.
Boy. it is so very familiar. It is a repeat what ERICY had said before CDMA networks started.
Just stay tuned. It is the US, Canada, and Korea's operators' money on the line. They will make it as a go if they think timing is still right. ERICY and Nokia have their own things to worry about. Why bother with other companies plan. Mind your own business. I say.
European mobile firms face new challenge in China
By Matt Pottinger
BEIJING, March 24 (Reuters) - After storming to a commanding lead in China, European mobile phone companies like Ericsson and Nokia could face a tough challenge if China follows through with plans to open the door wide to U.S. cellular technology.
Nokia and Ericsson , however, do not appear unduly concerned, and analysts said it would take time for CDMA technology to prove itself in the market.
In a sudden shift, China has signalled it will allow Chinese telecommunications firms to build CDMA (Code Division Multiple Access) networks, industry players said. The U.S.-developed technology is now limited to trials in four cities.
China's market for mobile network equipment and handsets, worth billions of dollars annually, has been dominated by GSM (Global System for Mobile Communications) technology from Finland's Nokia and Sweden's Ericsson.
Beijing now appears ready to back its small telecommunications firm, China Unicom, to build CDMA networks to compete with the state-owned virtual monopoly China Telecom, Unicom officials and foreign executives said.
''It's not good news, of course, if it happens,'' said Ericsson senior vice-president Jan Malm in Beijing.
Andrew Page, head of Nokia's corporate planning in China declined to comment on the impact of such a shift.
''It's still speculation. We can't really comment about that until there's some form of government announcement,'' he said.
Neither of the Nordic companies make CDMA network equipment although Nokia does make CDMA handsets for the U.S. market.
The stakes in the Chinese market are huge.
In 1998, China overtook the United States as Ericsson's largest market, with more than $2.8 billion in sales. For Nokia, China last year represented its second largest market, with 13 percent of total sales, or $2 billion.
China has more than 23 million mobile phone subscribers, and the Ministry of Information Industry projects nearly 40 million by the end of the year.
In a recent interview, before China's apparent policy shift, Page said: ''We have global growth targets of 25 to 35 percent and we have similiar targets for China as well,'' in 1999.
Companies that would benefit from the expansion of CDMA include U.S. equipment suppliers Motorola (NYSE:MOT - news), Lucent Technologies (NYSE:LU - news) as well as Qualcomm Inc (Nasdaq:QCOM - news), which stands to earn hefty royalties on the technology.
Canada's Nortel (Toronto:NTL.TO - news) and South Korea's Samsung [SAGR.CN] are also CDMA equipment providers and are likely to benefit.
They argue the technology makes more efficient use of scarce airwaves than GSM and has superior voice quality.
But Ericsson and industry analysts said CDMA could have a difficult time cracking China's market, even if it is given Beijing's official blessing.
''It looks very late to introduce a new standard,'' said Ericsson's Malm.
Even under an aggressive expansion plan, he said it could take years for CDMA networks to become as ubiquitous as GSM, which is more attractive to consumers who want the ability to use their telephones in other cities.
''We have a very strong case with GSM. We think we will be able to compete,'' he said.
Duncan Clark, a partner at telecom consultancy BDA Associates in China, called Unicom's plans to gain two million CDMA subscribers this year ''crazy.''
''Where are they going to get the expertise and the people to deploy it?'' he asked, citing the time and capital needed to order, install and perfect the networks.
''Commercially, I don't see the value in it,'' he said.
Its real worth is as a political gift from Premier Zhu Rongji to Washington, which is fuming over a $57 billion trade deficit with China last year. Zhu, who is said to back the CDMA plan, is due to travel to the United States in April.
''It's a box with lots of wrapping paper, but you open it up and nothing's inside,'' Clark said.
Best,
Brian H. |
