NEC, China group plan 3G equipment venture

NEC Corp. and a Chinese government-affiliated research group will set up a 3G telecom equipment venture in June in Wuhan, NEC said.

NEC and a Chinese government-affiliated research group are planning to establish during June a joint-venture that will work on 3G (third-generation) obile systems, NEC said in a statement last week.

Formation of the venture, which will be involved in 3G infrastructure development, design, manufacturing, sales and maintenance, comes ahead of the issuance of 3G licenses by China's government. Observers expect licenses to be handed out during 2005 or 2006 and several foreign telecommunications equipment companies are preparing for this by establishing similar ventures.

NEC's new venture, Wuhan Fiberhome Mobile Communication, will be owned 65 percent by Wuhan Research institute of Post and Telecommunications (WRI), 35 percent by NEC and 5 percent by others, the statement said.

It will be based in Wuhan City and will work on WCDMA (Wideband Code Division Multiple Access) and TD-SCDMA (Time Division Synchronous Code Division Multiple Access) systems based on existing NEC 3G equipment, NEC said. The former format is emerging as a major global standard for 3G networks while the latter has been largely developed in China and is expected to be used by at least one Chinese 3G operator.

In January this year, NEC said it had begun assembling 3G base stations at its NEC Telecommunications (China) factory in Tianjin, in northern China. At present the factory is being used to supply equipment to European carriers but also makes up a part of NEC's planning for the time when China issues 3G licenses. NEC is planning to use the factory to supply the local market should orders be received.

Wuhan is several hundred kilometers west of Shanghai in Hubei province and is also the home to another 3G joint venture. Nortel Networks and local company Putian agreed in January to establish Putian-Nortel Networks Telecommunications Equipment. The company, based in Wuhan, will research, develop, manufacture and sell WCDMA (Wideband Code Division Multiple Access) and TD-SCDMA (Time Division Synchronous CDMA) telecommunication equipment, Nortel said at the time.

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