China Unicom, constructor of the country's only CDMA (code division multiple access) mobile network, Thursday lifted the curtain on the beginning of severe competition amongst 19 CDMA phone makers.
A show was held Thursday by China Unicom, in which mobile phone manufacturers exhibited their products to attract more retailers.
Among the licensed companies, Motorola (China) is the only foreign firm with the rest being domestic firms, which includes many original home appliance makers.
China Unicom's CDMA network will begin operating in the fourth quarter of the year. The network aims to support 15.15 million subscribers and cover 300 cities across the country.
As mobile telecom has become the most rapidly growing industry in China, many companies want to get their feet in the door of the mobile phone market.
The licensed firms include Bird, Kejian, ZTE, Capitel, TCL, Haier, Eastcom, Konka, Hisense, Nanjing PTIC, Tianjin PTIC, Xoceco and Motorola.
Many of the licensed CDMA phone makers are home appliance vendors like Haier, TCL, Konka, Hisense and Xoceco.
The Ministry of Information Industry (MII), the industry watchdog, is not likely to issue more licences for producing CDMA mobile phones, as 19 companies is already too much for the market, according to an MII official.
If foreign brands want to enter the Chinese market, by setting up joint ventures or co-operately producing CDMA mobile phones, the solution would be to work with Chinese partners.
On the other hand, not all licensed Chinese companies have the confidence to be successful in the market, they want matured foreign partners too.
Hitachi, Japan's major CDMA phone maker, and Hisense moved quickly. The two said late on Tuesday that they will co-operate in manufacturing mobile terminals in China.
The venture plans to capture 10 per cent of the upcoming CDMA market in China, may eventually expand to 5 million phones a year, said Zhou Houjian, president of Hisense.
Most of the phones made at Hisense's Qingdao plant will be sold in the local market and some will be sold in the United States.
"We have to start the business in China,'' Masaki Kawase, a senior chief engineer at Hitachi's Digital Media Products Division said. For exports, "the main target is the United States,'' according to a Bloomberg report.
China is now the biggest mobile telecom market and has more than 120 million subscribers. But nearly all of them are adopting the GSM system (global system for mobile communications), a standard that is mainly used in Europe and Asia.
In comparison with GSM, the CDMA will attract customers with lower service charges.
(China Daily 08/31/2001)
