HONG KONG-China United Telecommunications Corp.’s plan to deploy Code Division Multiple Access technology ensures its survival into the next generation and creates momentum for cdmaOne technology throughout the Asia-Pacific region, cdmaOne proponents indicated at the CDMA Development Group’s fourth annual CDMA World Congress in Hong Kong last week.
“We have such a big footprint and a cost advantage now. Wideband CDMA technology can’t be used as a way to shut out cdmaOne anymore,” said Perry LaForge, CDG director.
CdmaOne backers have fought a bloody battle over 3G technology for more than a year in their attempts to harmonize their cdma2000 proposal with W-CDMA technology, an incompatible proposal Japanese and European’s standards bodies have selected for greenfield networks and as a migration path for Global System for Mobile communications networks. GSM technology remains strong in China, and months ago it was unclear whether the Chinese government would allow cdmaOne technology to proceed commercially. In they eyes of cdmaOne proponents, W-CDMA technology threatened to squeeze out cdmaOne-based 3G technology as operators around the world witnessed major regions committing to GSM and W-CDMA technology.
Recent operator meetings did not result in one CDMA-based standard but a harmonized CDMA proposal with optional modes and chip rates. The International Telecommunication Union in Beijing endorsed the proposal weeks ago in a meeting in Beijing. Though one chip rate was not achieved, with “China Unicom going CDMA, it doesn’t matter,” said LaForge.
And vendors say China Unicom’s cdmaOne plans, coupled with improving economic conditions, could result in a domino effect in the Asia-Pacific region. With Australia, Japan and now China behind cdmaOne technology, operators in the region now have more of an incentive to push toward cdmaOne technology.
“Operators have been watching China closely,” said Scott Erickson, vice president of the Wireless Networks Group Asia/Pacific with Lucent Technologies Inc. “China opening up offers the mass-market appeal.”
“The Chinese market’s size as a percentage of the region will drive the economies of scale,” said Crispin Vicars, analyst with the Yankee Group in Boston. “China also is a lead market in terms of influencing the technical direction of other operators.”
In particular, manufacturers say Singapore Telecom and Chungwa Telecom, the dominant carrier in Taiwan, are close to tendering cdmaOne contracts because of China Unicom’s cdmaOne decision. SingTel earlier this year put its cdmaOne deployment plans on hold, citing uncertainty over 3G technology. Chungwa, said Vicars, is in a dominant position in Taiwan. Chinese mobile phone users account for a large chunk of roaming traffic into Singapore and Taiwan.
Today, Hutchison Telecommunications Hong Kong Ltd., Japan’s DDI Corp. and IDO Corp., along with Shinsegi Telecom in South Korea, are partnering to offer international automatic roaming by the end of the year-the first extensive international roaming initiative in the region among cdmaOne operators. China Unicom’s deployment is sure to put pressure on roaming in the Asia-Pacific region as cdmaOne operators address potential roaming traffic.
China Unicom (which competes with GSM giant China Telecom) said it will begin cdmaOne network construction in the eastern regions and some major cities this year.
“Our strategy for development is different from the traditional plan,” said Wang Jian Zhou, executive vice president of China Unicom, in an address to conference attendees. “Because of the rapid development for marketing demands, the new network will begin with large coverage areas with smaller capacity.”
Phase I of China Unicom’s project will result in potential capacity of 3 million customers, while the phase 2 network, scheduled for the end of 2000, will support nearly 10 million customers. Jian Zhou said by 2003, the network will have capacity to support about 40 million subscribers.
“We will pay much attention to the 3G migration,” said Jian Zhou. “We think CDMA is the best way for a smooth migration. We want [the first phase of 3G migration] as soon as possible.”
China Unicom’s plans, however, will be a challenge for handset vendors. Jian Zhou indicated the need for a GSM/CDMA handset to augment the GSM coverage it already has in China. Few vendors are working on the concept today, and many indicate difficulties in pasting the two technologies into one handset. But the demand for such a product will grow as consolidation continues and companies such as Vodafone plc and AirTouch Communications Inc. work to connect disparate GSM and cdmaOne networks. Telstra of Australia is constructing a nationwide cdmaOne network, but also operates a GSM network in the region, while Hutchison in Hong Kong operates both networks.
China Unicom also wants user identity modules not available on cdmaOne systems today.
“The Chinese like to change handsets often,” said Jian Zhou. “We’d like to push a UIM card. Maybe it will be realized in 3G, but we hope to make that earlier. Without a card it is also difficult for prepaid service.”
