Chinese equipment market tumbles forward

The Chinese market for mobile network equipment continued to creep forward as Alcatel-Lucent announced several major infrastructure contracts with Chinese wireless operators, and the Chinese government made steps toward issuing 3G licenses.
The Chinese market continues to stand as a gold-mine for the world’s network equipment suppliers. The country counts more wireless subscribers than any other, and still has plenty of room to grow. But the Chinese government has been dragging its feet for years on issuing 3G licenses, a situation that has forced the world’s network equipment suppliers to watch and wait for their chance to score a piece of what should be a multi-billion dollar pie.
The latest movement: According to the Wall Street Journal, the Chinese government set technical specifications for both W-CDMA and CDMA2000 technologies, an indication that government officials will be technology-neutral when issuing 3G licenses.
China is working to foster its home-grown TD-SCDMA network technology as a way to promote local suppliers, but the new technical specifications could indicate that TD-SCDMA will compete directly with the world’s established 3G technologies.
And while vendors continue to wait for the Chinese government to issue 3G licenses-and the subsequent windfall from operators’ 3G buildouts-it appears there’s still money to be made.
Alcatel-Lucent announced a pair of contracts with China Unicom and China Mobile valued at a combined $460 million for telecommunications equipment and a range of network projects.
The agreement with China Mobile, valued at $340 million, puts Alcatel-Lucent in a position to strengthen its presence in China as one of the major GSM/GPRS/EDGE equipment suppliers for the operator. The agreement calls for Alcatel-Lucent to provide the operator with radio and core network equipment and services that will support China Mobile’s network expansion plans for the year.
“China’s mobile communications market continues to have enormous potential, and our goal is to help our customers realize that potential and achieve their business objectives,” said Frederic Rose, president of Alcatel-Lucent Asia Pacific.
Alcatel-Lucent has a series of contracts with China Mobile, including a recent deal to provide TD-SCDMA solutions for the operator’s trial network expansion.
The firm’s agreement with China Unicom, valued at $120 million, calls for Alcatel-Lucent to enable the operator to upgrade to CDMA2000 1xEV-DO Revision A in China Unicom’s network in Macau as well as a further expansion in the CDMA core network and applications and will support the expansion. Alcatel-Lucent will also provide the operator with service and components to support its GSM service.
Alcatel-Lucent said the agreement secures its position as the vendor with the largest installed base in China Unicom’s CDMA network.