China Unicom’s planned deployment of Code Division Multiple Access technology remains delayed as Unicom works on sorting out the paper work with both the Ministry of Information Industry and the State Development Planning Commission, vendors in China say.
Chinese Premier Zhu Rongji recently told reporters that the government did not order a stop to construction of the network. He pointed to the lack of coordination and communications between the MII and SDPC. Both agencies appear to be processing the paper work, but it’s unclear how long the delay will last, say manufacturers.
The attempts to deploy CDMA technology on a wide scale were delayed for more than a year for various reasons. Iin early 1999, the Chinese government allowed the technology as a World Trade Organization concession.
The most recent delay involved Qualcomm Inc. and the Chinese government, who were negotiating licensing terms over Qualcomm’s intellectual property rights to CDMA technology. In February, China Unicom and Qualcomm announced a deal that gives Chinese manufacturers who enter license agreements with Qualcomm reduced royalty rates if they agree to purchase their CDMA Application Specific Integrated Circuits from Qualcomm as long as the prices are competitive. China Unicom was designated to negotiate this framework agreement with Qualcomm.
China Unicom, the underdog to telecom giant China Telecom, holds about 12 percent of the Chinese mobile phone market. It wants to use CDMA technology as a key differentiator. The more time lost, the less likely it becomes that China Unicom will reach its capacity target of 10 million by the end of the year. Delays also could snarl Unicom’s listing on the Hong Kong and New York stock exchange next month.
