Closing the technology gap Chinese vendors gain on rivals

The opening of the Chinese CDMA market gives local equipment suppliers a chance to close the gap with foreign rivals, according to senior vendor executives.China s number two operator, China Unicom, last month issued US$1.45 billion in contracts to 10 domestic and foreign vendors for a nationwide cdmaOne system.

The biggest domestic winner was ZTE, which has been contracted to provide 1.1 million lines in 10 provinces. We ve been doing GSM only three years, but we have been developing CDMA since 1995 so we are very competitive with the foreign companies, said ZTE marketing manager Rambo Zhou.ZTE is now carrying out technical trials of the cdma2000 1x technology and plans to make it commercially available early next year.

ZTE was the first Chinese company to sign with IP sharing agreement with Qualcomm. It is also the first company anywhere in the world to make a CDMA phone with a SIM card.Jan Malm, president of Ericsson China, said Chinese players competed primarily on price but the technology gap is narrowing .He said China was now a sophisticated electronics manufacturing center which was attracting vendors through its experience as well as its massive market.

China has built up a sub-supply industry which is one of the best in the world, Malm said.He said the liberalization that would follow China s accession to the WTO would put more competitive pressure on the foreign vendors. However, I don t think it will be a revolution, he said, adding it offered advantages such as the reduction of import duties.

ZTE vice president Shi Li-rong also believed liberalization would not affect his business much because the company was already competing head to head with foreign players in China and abroad.