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Unicom Raises CDMA Hopes
Three months after calling off plans to use current-generation wireless technology backed by San Diego-based Qualcomm, China's No 2 mobile phone company is raising expectations of a change of heart.
Chinese and foreign telecoms manufacturers, who would stand to earn billions of dollars selling CDMA (code division multiple access) equipment and handsets, said Tuesday China Unicom had signalled it may build narrowband CDMA networks as early as January.
"They've been cautiously optimistic with us," said Scott Erickson, Hong Kong-based vice-president of wireless marketing for Lucent Technologies.
Bureaucratic wrangling with government regulators which sabotaged Unicom's initial CDMA plans were nearly sorted out and Unicom ``would be given the green light to go forward'', Mr Erickson said.
Senior executives at Qualcomm, Ericsson of Sweden, Hyundai Electronics of South Korea, and China's Qiao Xing Universal Telephone, Datang Telecom and Eastern Communications said they had received similar signals following a meeting last month between Chinese telecoms manufacturers and Unicom executives.
Unicom chairman Yang Xianzu repeated Tuesday the company was studying the adoption of CDMA.
But he would not be drawn on whether the company intended to roll out current narrow band CDMA networks, or wait a year or two for a more advanced generation of the technology.
"We are currently planning and preparing for CDMA," Mr. Yang told Reuters.
"We have taken a positive position towards CDMA all along."
If Unicom waits to build future generations of CDMA, equipment makers and Qualcomm - which earns royalties from its CDMA patents - would miss the lucrative opportunity of an immediate roll-out of narrow band networks.
Unicom, in the run-up to the June listing of its Hong Kong subsidiary, China Unicom Ltd., said it would not adopt current-generation CDMA. That news battered Qualcomm stock.
Industry analysts said at the time Unicom's decision made sense since it had already spent heavily on building networks using a rival European wireless standard called GSM (global system for mobile communications). "The decision not to deploy narrow band CDMA was widely seen as a rational and commercially sensible position," said David Gibbons, telecoms analyst at HSBC in Hong Kong.
China, the world's second-biggest mobile phone market, has only about 200,000 subscribers on CDMA networks, against 60 million users on GSM networks.
But technological advantages of CDMA over GSM, and new political pressures raised by Chinese industry and government leaders, have apparently caused Unicom to think again. CDMA is more efficient than GSM, allowing for more phone calls and data to be crammed into precious spectrum. That is why all mobile networks - including GSM - eventually will be upgraded to incorporate CDMA technology.
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