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To: marginmike who wrote (25632)	3/31/1999 10:03:00 AM
From: Valueman	Read Replies (3) \| Respond to of 152472

Wednesday March 31, 3:55 am Eastern Time INTERVIEW-China Unicom to buy CDMA system By Matt Pottinger SHANGHAI, March 31 (Reuters) - Chinese telecommunication firm, China Unicom, will buy a five million subscriber mobile phone network from mainly U.S. companies later this year, a member of the company's board of directors said on Wednesday. ''We will roll out phase one of CDMA systems this fall,'' Liu Zhenyuan, director and chief Shanghai representative of the small state-owned telecom firm, told Reuters. 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 while the rest of China operates on the European GSM standard. China's market for mobile network equipment and handsets, worth billions of dollars a year, has been dominated by GSM (Global System for Mobile Communications) technology from Finland's Nokia and Sweden's Ericsson . An agreement on the new network would be formally announced during Premier Zhu Rongji's visit to the United States next week, Liu said. It was still undecided which companies would be selected to build it, he said. ''We will decide that based upon bids for the best price and the best technology,'' he said. Liu said he was not sure of the exact value of the contract, but he said it could be worth hundreds of million of dollars to U.S. vendors of CDMA networks. Industry analysts said Motorola (NYSE:MOT - news), Lucent Technologies (NYSE:LU - news) and Canada's Nortel were in negotiations with China Unicom. Ericsson, which acquired the CDMA equipment division of San Diego-based Qualcomm Inc (Nasdaq:QCOM - news) last week, was also in talks, the analysts said. Zhu is set to visit the United States next week and many industry analysts had expected an announcement on CDMA after Chinese companies had expressed strong and sudden interest in buying CDMA networks. Zhu has backed CDMA as part of his efforts to spur competition in an industry dominated by state-owned China Telecom. Liu declined to give specifics on the geographical reach of the new system, but said Shanghai would be a ''focus point.'' He said it would take a year to build a network to a five million subscriber capacity, but made no guarantee that the system would attract that many subscribers. ''That depends on how much interest customers have in CDMA,'' he said. Lucent is expected to sign a smaller deal on Thursday with the Great Wall company to triple its CDMA trial network in the southern city of Guangzhou, a source familiar with the deal said. --------------------------------------------------------------------------------