SAN FRANCISCO (02/25/2000) - The future of CDMA (code division multiple access) in China is once again in doubt with reports surfacing that the Chinese government has put an indefinite hold on its plans for deployment of the mobile telecommunications technology. However, the Chinese authorities have yet to confirm the CDMA freeze and U.S. companies remain hopeful that the situation will be resolved.
"We've had no direct specific confirmation from Chinese government officials, but, according to our people (in China), it (the hold on CDMA) indeed does look as though it has happened," Perry LaForge, executive director of the CDMA Development Group (CDG), based in Costa Mesa, California, said in a phone interview today. CDG is an international nonprofit trade organization which evangelizes the leading CDMA technology known as cdmaOne developed by Qualcomm Inc.
"It's hard to tell what the situation is, we've not heard officially either," said Christine Trimble, a spokeswoman for Qualcomm, in a phone interview today.
Yesterday, the Wall Street Journal reported that the Chinese government has placed a hold on the deployment of CDMA.
The possible deployment freeze is yet another stage in the continuing saga of on-again, off-again moves towards CDMA adoption in China. The country has been conducting pilot testing of the mobile technology for several years, but has yet to implement CDMA. China's mobile phone operators currently run their networks on a CDMA rival -- GSM (global system for mobile communications) technology.
Hopes were raised late last month that CDMA would finally be deployed on the Mainland. China's second-largest telecom carrier China United Communications Co. (China Unicom) announced it had reached an agreement with Qualcomm to build CDMA-based wireless telecommunications networks. [See "Qualcomm, China Unicom Sign Deal for CDMA," Jan. 31.]As far as Qualcomm is concerned, that deal still stands. "We believe we have a solid agreement with China Unicom and are committed to deploying it," Qualcomm's Trimble said today. "We will continue to work with Chinese manufacturers."
News of the reported CDMA freeze has "come as somewhat of a surprise to all of us," particularly since CDG executives have recently met with China Unicom executives, said CDG's LaForge. "As we've been working with them, it's been very much full speed ahead and they've been very excited and energized about CDMA."
LaForge said that the reason for the Chinese government apparently calling a halt to CDMA deployment is as yet unknown, but is likely to be a political issue rather than a technology one.
"I don't know, it could be tied to WTO or to the EU (European Union) discussions with China which just ended (in Beijing)," LaForge said. China is still in international negotiations concerning its planned entry to the World Trade Organization, having reached an initial bilateral agreement with the U.S. in November of last year. [See "U.S., China Reach WTO Deal," Nov. 15, 1999.]"One thing I've learned doing business in China, despite the twists and turns that happen, you're successful if you keep your eyes straight ahead and keep going forward," LaForge said. "I'm encouraged that CDMA in China will move ahead. I still maintain that China will be a huge opportunity for us."
Last year, a China Unicom senior executive told the CDMA World Congress in Hong Kong that the carrier hoped to be able to accommodate 10 million [M] subscribers on its planned CDMA network by the end of 2000 and 40 million [M] users by the end of 2003. [See "CDMA WORLD CONGRESS: Unicom Gung-ho on CDMA," June 16, 1999.]The Chinese government last year awarded China Unicom a license to construct and run a CDMA network, and also allowed the telecom to take over the CDMA pilots that China Telecom, the dominant market carrier, had been running in four Chinese cities -- Beijing, Guangzhou, Shanghai and Xian.
Qualcomm announced Tuesday the closure of the deal to sell its CDMA phone business to Japanese electronics maker Kyocera Corp. [See "Kyocera, Qualcomm Close CDMA Sale," Feb. 23.]CDG, based in Costa Mesa, California, can be reached at http://www.cdg.org/.
Qualcomm Inc., in San Diego, California, can be reached online at http://www.qualcomm.com/.