South Korea's Samsung Electronics Co. Ltd. and Shanghai Bell Co. Ltd. announced plans Monday to establish a joint venture company to develop, manufacture and sell CDMA (Code Division Multiple Access) based cellular telecommunication network equipment.
The new company, which will be called Shanghai Bell Samsung Mobile Communications Co. Ltd., is being formed as part of Samsung Electronics' bid to win a slice of network infrastructure orders expected to be placed by China United Telecommunications Corp. (China Unicom) next year. The venture has received Chinese government approval, Samsung said in a statement.
China Unicom, the country's second major carrier, started deploying commercial CDMA networks earlier this year as the first stage of a national cellular network. Working with Nortel Networks Corp., Lucent Technologies Inc., L.M. Ericsson Telephone Co. and Motorola Inc., the first stage is due to be completed by the end of this year and will serve around 13 million users. The second stage orders, due next year, are expected to push network capacity to 70 million users.
South Korea was the first nation in the world to begin commercial CDMA service and, with high-speed 2.5G services already in service, is on the leading edge of CDMA worldwide. Experience in the technology coupled with geographic proximity to China has given the country's major electronics companies high hopes for prospects in the Chinese market.
Shanghai Bell, which is majority owned by Alcatel SA, will own 51 percent of the new company with Samsung Electronics holding the remaining 49 percent. Initial paid-in capital will be US$12 million and the two companies will contribute a total of $29 million for operations.