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NewsGlobe: Financial
China Telecom stalks CDMA vendors
Completes first round of vendor evaluations
by Kendrick Struthers-Watson
China Telecom is about to release the bidding result for CDMA equipment
procurement this week.
By now it has completed technology evaluation of CDMA equipment from a number of major wireless infrastruture manufacturers. It is the first round of CDMA procurement after China
Telecom is encouraged to take over CDMA networks from China Unicom.
Led by China Telecom, several telecom makers such as Huawei, ZTE,
Nortel, Motorola, and Samsung have carried out a series of CDMA
equipment tests and having ‘secret’ meetings with the carrier.
Well-placed sources say that China Telecom officials from the carrier’s
Beijing Research Institute, Shanghai Research Institute and various
provincial operations met with representatives from Alcatel-Lucent,
Huawei, ZTE, Nortel, Motorola and Samsung to evaluate equipment for a
total of 81 tenders, which include solutions for rolling out CDMA EVDO
capabilities.
Alcatel-Lucent, Huawei, ZTE, Samsung and Nortel have submitted bids
for all 81 tenders while Motorola has reportedly submitted 39 bids.
China Telecom’s future strategy shows that it will invest as much as CNY
80 billion (US$11.6 billion) building CDMA networks in the coming three
years. Initially, the number will be CNY 27.9 billion (US$4.05 billion).
By June 30, China Unicom had 43.17 million CDMA users. And the number
is expected to be 100 million in the coming two to three years,
accounting for 15% of the total telecom subscriber base. Value-added
CMDA services will take up 35% of the market.
China Unicom has said it expects to receive a 3G license after it merges
with China Netcom and could spend up to CNY100 billion (US$14.6 billion)
on capital expenditure in the next two years. In a statement to the Hong
Kong stock exchange, available on its website, China Unicom wrote
that "upon the completion of the proposed merger, the enlarged group is
expected to obtain a 3G license. As a result of the proposed merger, the
wireless capital expenditure of the enlarged group is expected to be very
substantial and may reach CNY100 billion in 2009 and 2010."
According to China’s telecom industry restructuring plan issued in June,
China Telecom will acquire China Unicom’s CDMA mobile network for CNY
110 billion (US$16 billion), while Unicom’s GSM mobile network (the
country’s second-largest) will be merged with China Netcom in a share
swap valued at US$56.3 billion.
Although officially being termed a ’merger,’ China Netcom will be delisted
and will become a wholly-owned unit of China Unicom. In its statement
China Unicom proposed changing its name to China Unicom (Hong Kong)
Ltd. after the merger is completed. The country’s restructuring will also
see mobile market-leader China Mobile acquire China Railcom, a small
fixed-line player.
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