With four big CDMA infrastructure contracts ramped up last week by China Unicom, the country’s second-largest operator, the Asian nation is on pace to race past the United States as the biggest wireless market in the world.
The contracts, penned with Lucent Technologies Inc., L.M. Ericsson of Sweden, Motorola Inc. and Nortel Networks Corp., are to supply CDMA equipment in 11 provinces, including Beijing, the nation’s capital. The services are scheduled to take off in October.
At the current rate, The Gartner Group expects the total number of mobile users in China to rise to 130 million at the end of this year, ahead of the United States. Merrill Lynch expects CDMA users to leap to 230 million by 2005. GSM remains the dominant technology, although CDMA, GSM and TD-CDMA protocols are expected to be complementary.
“The characterization as to which of the technologies is going to be the winner is a matter of debate,” remarked David Murashige, vice president of strategic marketing for Nortel Networks. “The technologies are always undergoing the process of one-upmanship.”
China had decided to adopt CDMA technology last October after backing away from it earlier in 2000.
Ericsson says it expects GSM subscribers in China to reach 150 million, against CDMA’s 50 million by 2003, according to Ake Persson, president of Ericsson CDMA Systems.
Both Murashige and Persson attribute China’s wireless blossom to its huge base population, its predominantly rural landscape, burgeoning industrial sector and the nation’s competitive disposition toward the United States.
“The question is not when, but how,” said Murashige on China’s ability to be the No. 1 market in the world.
Nortel Networks, which signed a $275 million deal for its digital cellular networks, will supply CDMA infrastructure in Shandong, Henan, Heilongjiang, Hunan and Shaanxi provinces and Chongqing municipality.
“We are committed to deploying our industry-leading solutions for accelerating the application of the profitable high-performance wireless Internet across the country, creating “anywhere, anytime, seamless services for customers,” said Robert Mao, president and chief executive officer, Nortel Networks China.
Nortel also will provide its CDMA Rural Cell, a base station designed to improve the economics of rural digital cellular service, providing a coverage radius up to 180 kilometers, according to a press statement.
Lucent’s contracts, which are valued at “hundreds of millions of dollars,” allow the company to deploy equipment in Anhui, Guangdong, Hubei, Hunan, Inner Mongolia, Liaoning, Shandong, Shanghai, Shaanxi and Zhejiang provinces.
“This is a major market entry for Lucent in deploying the latest wireless technologies in the world’s most populous nation,” said Jim Brewington, group president, wireless networks group for Lucent.
Ericsson will install its solution in Jiangsu, Anhui, Sichuan, Yunnan, Liaoning, Heilongjiang and Henan provinces.
The company said the contracts include 800 MHz compact radio base stations, base station controllers, mobile switching centers, home location registers and a full range of services including network management, training, network rollout and technical support.
“Ericsson is pleased to further strengthen our market leadership in China through this cooperation with China Unicom in CDMA, which also laid a solid foundation for the migration to 3G,” said Jan Malm, president of Ericsson Co.Ltd in China.
Motorola’s Telecom Solutions Sector won contracts totaling $407 million to provide 800 MHz CDMA network infrastructure in Guangdong, Jiangsu, Fujian, Hebei, Jilin, Shanxi, Jiangxi, Kinjiang and Gansu.
“The CDMA infrastructure that we will be installing, lays the groundwork for China Unicom’s plan to migrate to cdma2000 1x networks in 2002,” said Simon Leung, Motorola corporate vice president and general manager of GTSS’s Asia-Pacific region.
Murashige said China Unicom and China Telecom, the top carrier in China, will compete at the operator level, not at the customer level. Person said CDMA has acquired up to 14 million subscribers this year.
He said an edge for China compared with the United States is that it is a lot cheaper to deploy wireless networks, unlike wired networks, which entail laying pipes over long geographical stretches.
Person remarked that the CDMA space opened when Chinese military-which controlled it under the organization called CESEC-decided to cede it two years ago for commercial service as part of Unicom’s networks on the 850 MHz spectrum band.
China’s proprietary technology, TD-CDMA, which is a hybrid of TDMA and CDMA, has been accepted by ITU, although it has not been accepted in any other country.
All the technologies are expected to operate in the country, according to Persson and Murashige.
“Each technology has advantages and disadvantages based on heritage as to evolution to new technologies relating to intellectual property, spectrum efficiency and economies of scale,” noted Murashige.
