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CDMA Network Bidding Will be Fierce
A fierce bidding contest opened Wednesday between 12 domestic and joint-venture telecom companies battling for contracts to build the first nationwide code-division multi-access (CDMA) mobile phone network.
China Unicom, the country's second biggest mobile operator, plans to invest 20 billion yuan (US$2.5 billion) this year in the network, which will give mobile users higher quality voice signals.
The total investment in the CDMA network will amount to 70 billion yuan (US$8.5 billion) within three years.
Four of the bidders are joint ventures with foreign partners, while the other eight are domestic companies with strong links to international telecom giants.
The foreign companies in the joint ventures include Lucent and Motorola of the US, Sweden's Ericsson, and Nortel of Canada. Samsung, the South Korean conglomerate, will form an alliance with one of the domestic equipment providers.
Among the eight Chinese firms, GDT, ZTE, Datang and Huawei -- the biggest domestic providers -- are strong contenders for contracts.
China Unicom will announce the results of the bidding in mid-April, and a pilot operation will begin in October in some cities yet to be named. "Domestic companies will be considered first,'' said Wang Jianzhou, vice-president of China Unicom.
Jim Lin, chief telecom analyst of Frost & Sullivan, a US-based research house, said, "At least 10 of the 12 bidders will be selected, as the construction project is huge.'' The nationwide network will cover 300 cities, offering cheaper calls as well as high voice quality.
The development of the CDMA network will make China Unicom a more serious challenger to China Mobile, the dominant mobile telecom operator.
China Unicom plans to attract 13.3 million CDMA users this year. At the moment, the small-scale CDMA networks operating in Beijing, Shanghai, Tianjin, Xi'an and Guangzhou have only 550,000 users.
Yang Xianzu, chairman of China Unicom, said the main expansion of CDMA network services would start next year. China Unicom expects to attract new CDMA users at a rate of more than 10 million a year, he said.
China Unicom has set up a subsidiary, Unicom Horizon Communications, to handle the network's construction.
When the network is fully operational, the listed arm of the State-owned China Unicom parent group will buy part of Horizon's equity, according to Wang Yingpei, president of the new firm who is the former head of China Unicom's Yunnan branch.
The service charge for CDMA customers is less than half that of the GSM (global system for mobile communications) networks, which has more than 80 million users in the country.
CDMA network charges of 0.20 yuan (0.2 US cents) per minute compared with GSM charges of 0.40-0.60 yuan (0.5-0.7 US cents) per minute.
Source: China Daily
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