ZTE Pushing for 3G Mobile World

SHENZHEN based ZTE Corporation, which is an independent member of Third Generation Partnership Project2 3GPP2, hosted a critical technical specification standards setting conference in Shenzhen last week. To many industry observers, it signifies the increasing international profile of ZTE, China s leading telecommunication equipment developer, and China s telecommunications service market in general. Third generation mobile technology has long been a hot topic among researchers and government policy makers. However manufacturers all over the world have been slow in rolling out actual products. In fact, research efforts have actually slowed down recently due to technical and business considerations. But to Chinese telecommunications service operators and equipment providers, the slowing development activities in the world may offer a good opportunity to catch up. On the other hand, the huge market in China means that the country must have its own3Gtechnology. China now has almost130million mobile phone users, the largest clientele of mobile services in the world. Over the next four years, the number is expected to rise to300million, while the estimated investment in telecom infrastructure will likely exceed 500billion yuan (US $ 61billion). Handset sales will also exceed 500billion yuan. Experts say that telecommunications related services will generate revenues of well over10trillion yuan (US$1.2 trillion). No wonder China is the most enticing emerging telecom market in the world. Technical excellence Therefore it is important that Chinese telecom operators and equipment providers come up with proprietary technology and be involved in setting international standards. ZTE Corporation, a well-established telecommunications technology firm, is respected for its large scale research and development of Code Division Multiple Access CDMA technology. The cell phone technology, which offers greater and more flexible bandwidth, is believed to be a stepping stone to third generation technology, which supposedly will offer combined voice, data and even video transmissions over wireless phones. After six years of intense research and development, ZTE along with other domestic telecom equipment manufacturers, broke the domination by foreign companies of the Chinese telecom equipment market by winning major bids from China Unicom, China s second largest telecom company. In May of this year, ZTE won major contracts from China Unicom to offer base stations and switching systems. And it is worth noting that ZTE was the only domestic bidder contending with proprietary technology. Through the contracts, it won the advantageous position of being a core vendor. According to experts, base stations and switching systems are the heart of a CDMA network, which virtually guarantees ZTE will win more contracts along the way to maintain, update and expand the network system. The development of a CDMA network al so enabled ZTE to develop a series of supporting products including intelligent networking and short messaging systems. On another front, ZTE also won major contracts with China Mobile in Guangdong alongside Lucent Technologies and Motorola. Before that breakthrough, Guangdong, one of the most wired provinces in China, only purchased equipment from big name international manufacturers. ZTE was also one of the first domestic telecom manufacturers to squeeze into the foreign dominated market. Meeting 3G challenges ZTE s success in developing the Global System of Mobility GSM and CDMA helped it accumulate important experience and know how in developing3Gtechnology. The company s GSM system has been deployed in20provinces and autonomous regions in China. It s GSM based short messaging system is the most widely used in China. In March of this year, ZTE s General Packet Radio Service, a digital radio transmission system, successfully passed testing by China Mobile, marking one more milestone in the company s technological progress. The company started research into3Gtechnology in1998with a view to achieving smooth changeover from the current technology into the third generation. Though it is easy to talk about the vision of speedy wireless access to voice, video and data, it is extremely difficult to come up with a satisfactory plan to make the switch. According to Xie Daxiong, vice president of ZTE s CDMA business, the company has to take all relevant factors into consideration in developing the3Gplan. For example, telecom service providers previous investments must be protected. China Mobile and China Unicom have both invested heavily in GSM and CDMA network systems. If the3Gtechnology were to make the existing technologies obsolete, it would be too costly to implement. In fact there are three international standards available for 3G development,namely CDMA2000,UMTS Wide spectrum Code Division Multiple Access and TD SCD MA Time Division Synchronous Code Division Multiple Access . Therefore ZTE has to prepare for all scenarios. Regardless of which standard China adopts, ZTE will be able to provide mobile terminals, network equipment, network planning and optimization and development tools for3Gtechnology according to ZTE officials. In order to prepare for the changeover, ZTE has already developed proprietaryIS 95anarrow band CDMA system and CDMA2001xbase stations and switches. In addition, the company launched the nation s first CDMA cell phone service, paving the way for the changeover. In June of this year, the company s CDMA1xmobile system, capable of combined voice, video and data transmission, was demonstrated in Hong Kong, marking yet another step forward in China s3Gdevelopment. ZTE is now one of the four companies in the world that has developed the cutting edge technology. And according to ZTE officials, ZTE is quicker in rolling out new technology than leading Western companies. And in some areas like compatibility, ZTE leads the world. Research capacity As a leading technology company in China, ZTE is also a base of research for the 863 national innovation project. The company was assigned China3GTelecommunication Research Project, whose aim is to develop a proposal of unified national standards. On the basis of the research project, ZTE has developed a number of innovative products that enable the third generation mobile system. For example, the company successfully developed a voice system based upon UMTS, indicating its capacity to launch3Gsystems. It also succeeded in developing high-speed video transmission, business process management capabilities. According to officials, the company s research activities yield not only innovative technologies, but also valuable experience and insights in developing the3Gtechnology when the time comes. Setting standards To many industry observers,3G is still not clear partly because a unified set of international standards has yet to come out. And experts believe that it is difficult, but important, to get all nations to agree upon a set of standards. Therefore all telecom companies, vendors and operators, are all interested in participating in developing the new standards. From the perspective of business, a favorable set of standards means speedy development and deployment. And from the technological point of view, participation in standards setting will facilitate a company s research and development by easy access to the latest information. As a result, ZTE began to take part in the standards setting discussions within the International Telecommunications Union. In May of this year, it joined 3GPP2 in discussion and deliberation of new standards. According to ZTE officials, the company s participation in setting international standards not only helps it keep abreast with the latest development, but also makes ZTE known in the overseas market. The company now supplies equipment to Southeast Asia, Middle East, Europe and Africa.