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Nokia, the world's top handset maker, has no plans to enter the CDMA-GSM dual-mode mobile phone market in China, a company executive said.

"In our (product) development roadmap, there is no such plan (for entering the dual-mode market)," said Larry Paulson, vice-president of product marketing at Nokia's CDMA business unit, in an interview with China Daily.

"We are studying the market. But right now we are ready to invest in research and development (R&D) activities (related to CDMA-GSM dual-mode phones)."

The remarks come at a time when China Unicom, the country's No 2 cellular operator, is making a big push into the CDMA-GSM dual-mode market.

GSM and CDMA are the two major 2G (second generation) mobile phone standards. Both provide most of the same services, but because of technological differences the phones are incompatible with the other type of network inconvenient for those wanting to use roaming services overseas.

Unicom, one of the few operators in the world that run networks based on both standards, has been trying to bridge the technological differences. Unicom and US wireless firm Qualcomm have developed CDMA-GSM dual-mode phones that allow users to switch between GSM and CDMA networks. And Unicom also offers GSM users high-speed CDMA-based data services.

Earlier this month, Unicom launched seven new dual-mode handsets customized by six manufacturers including Samsung and China's ZTE Corp. For the first time, the new phones enable simultaneous standby of the two telephone numbers based on CDMA and GSM, which is expected to give Unicom's dual-mode handset business a boost.

But Paulson indicated that the dual-mode phone market will remain a niche as "utilization of the dual-mode phones is much for Chinese requirements."

Nokia's support is becoming crucial to China's CDMA market. The Finnish firm was a latecomer to the market. It obtained a licence to make and sell CDMA phones in China in June 2003.

As Qualcomm provides the vast majority of CDMA chipsets sold globally, Unicom has been counting on Nokia's entry to drive down the prices of CDMA handsets. Nokia partnered with Texas Instruments and STMicroelectronics to develop CDMA chipsets.

Nokia announced it would form a CDMA handset joint venture with Japan's Sanyo in February as part of its plans to spin off the underperforming CDMA handset business. That has been a big blow for Unicom, the world's largest CDMA operator.

But Nokia scrapped the plan for the joint venture in June. Paulson said that's because the CDMA market is showing signs of improvement, especially in North America and Latin America.

"We need to alter the direction. We will continue to serve the CDMA market by increasing investment," Paulson said.

Nokia's CDMA business has improved in recent months. Its total handset business has been "surprisingly strong" in the latest fiscal quarter. Yet, the average selling price (ASP) of GSM handsets, which form the majority of Nokia's mobile phone business, has decreased.

But the ASP of CDMA phones has continually grown, noted Paulson, adding Nokia will seek a partnership with Unicom and expand their portfolio to better tap China's CDMA market.

"In the CDMA space, we will forge partnerships with third parties and utilize our design and technological heritage and brands in the GSM market," he said.

Nokia is now the second largest vendor of CDMA phones in China. According to Beijing-based research house Analysys International, 20.51 million GSM handsets were sold in China in the second quarter, down 2.01 percent compared to the previous quarter. CDMA handset sales hit 1.57 million, up 7.44 percent.

(China Daily November 7, 2006)