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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Jens M. Ottow who wrote (1713)	4/6/1999 8:54:00 AM
From: tero kuittinen	Read Replies (1) \| Respond to of 34857

The way CDMA's triumph in China is unfolding is mesmerizing to follow. Since March 22 we've had a 50 M and a 40 M Chinese GSM deals for Nokia, a 100 million GSM deal for Motorola and a 100 million GSM deal for Lucent. There were two 20 M dollar CDMA deals last week. The media response? "China loves CDMA" Wired News tells us. "China changes tack on CDMA" gushes Total Telecom. I suppose the latter is true - China's only CDMA operator with national ambitions just purchased three GSM networks from Nokia. I'd definitely call this China Unicom decision "changing tack" - but not exactly into the direction most people seemed to anticipate. Just a couple of days ago China Unicom closed a 100 million dollar GSM deal with Motorola - the largest GSM deal Unicom has ever made. So China Unicom (the company that is supposed to launch a major CDMA expansion in China this year) is now buying GSM networks from Nokia and Motorola - and as far as I can tell the Nokia deal is the first new Chinese network customer any mobile telecom company has landed in 1999. This is important for future expansion deals - Unicom seems to be aiming at an extensive, nationwide GSM network to compete with China Telecom on an equal basis. At the very moment China Unicom is claimed by US media to be planning a massive CDMA expansion they are actually stepping up their GSM network build-up and increasing the number of their GSM network providers to include Nokia. Why is any operator suddenly starting to buy networks from a new manufacturer? This is usually a sign of strong future expansion - big operators don't want to be tied to a single manufacturer. Let's look at the Reuters "vision" of the Chinese situation from March 23: "China appears ready to bow to strong U.S. pressure and embrace a cellular telecommunications trade standard worth billions of dollars to companies such as Motorola and Lucent Technologies. Foreign equipment manufacturers said Tuesday that Chinese companies had expressed strong and sudden interest in buying CDMA (Code Division Multiple Access) networks -- a leading U.S. standard." Note the fine journalistic tradition for accuracy and objectivity in the use of phrases "bow to strong pressure", "embrace" and "strong interest in buying CDMA". Note the complete abscence of any reference to the explosive current GSM growth in China and the recent flurry of new expansion deals. No wonder so few investors seem to realize that nobody expects CDMA to top 10% market share in China by 2005 - not even if the nationwide expansion starts this summer. Tero