CdmaOne vendors in China anxiously are awaiting official government word on whether China
Unicom is allowed to deploy Interim Standard-95 technology.
“It appears China Unicom has been told that
they can proceed with their plans to deploy a CDMA network using the spectrum they already have,” said one
vendor in China. “They need to go back to the ministry and present what the plan is … It appears there needs to
be a final proposal and acceptance.”
Signs months ago indicated the Chinese government soured on cdmaOne
technology as U.S. officials indicated China essentially mandated Global System for Mobile communications as the
nation’s technology, preferring to wait for the development of third-generation systems. The government previously had
halted Unicom’s plan to deploy cdmaOne technology because it wanted the carrier to compete with state-run operator
China Telecom on an equal technology footing using GSM technology, said Hui Pan, chief economist and director of
the Asia-Pacific region with Information Gatekeepers in Boston.
But China is seeking endorsement to become part
of the World Trade Organization, and the fact that cdmaOne technology has not been allowed to commercialize in
China has concerned U.S. officials.
The Chinese government also is working harder to promote competition in the
telecommunications arena, said Pan. Unicom, the only mobile phone competitor to China Telecom, has struggled to
compete with the state-run giant, having only launched service in major cities. China Telecom’s subscribers number
about 24 million, while Unicom supports around 1.2 million customers.
The competitive seed was planted last
month when the Chinese government reassigned two high-level officials from the Ministry and Information Industry to
head up Unicom, said Pan. Unicom was reorganized into the MII last year.
Still, the government has not given
China Telecom Great Wall the green light to expand its four experimental cdmaOne networks. The People’s Liberation
Army, part army and part commercial conglomerate, owns 50 percent of Great Wall. Since last summer, the Chinese
government has tried to push the PLA out of commercial affairs, including telecom, in an effort to eliminate corruption
the government says is associated with the army. This effort has been at a standstill, as the PLA is refusing to leave the
profitable telecom business.
Unicom’s plans for deploying cdmaOne are aggressive. Reports indicate the operator
intends to install 40 million cdmaOne lines by 2001, with the ambition of garnering 40 million customers by 2003 and
investing in excess of $10 billion in the system.
“U.S. companies such as Lucent and Motorola stand to
benefit greatly,” said Pan. “Lucent is in a particularly strong position as the company has strong relations
with China Unicom in the data networking and transmission areas.”
No Chinese native vendor has expertise in
cdmaOne technology.
Commerce Secretary William Daley’s delegation is expected to visit China this week, and
vendors say plans could be solidified by then.
