China Unicom begins awarding CDMA contracts

China United Telecommunications Corp. (China Unicom) has selected South Korea's Samsung Electronics and Canadian telecom equipment manufacturer Nortel Networks as two of the equipment vendors for a nationwide CDMA (Code-Division Multiple Access) mobile phone network.

The Chinese mobile carrier last month sought proposals from vendors for its planned CDMA network, according to the official China Daily newspaper, which said the winning vendors would be chosen by mid-April. Nortel Networks, Motorola, Ericsson and Samsung were among the bidders, according to China Daily, along with Chinese vendors ZTE Corp., Huawei Technologies Co. Ltd., Datang Telecom Technology Group and GDT.

Representatives of China Unicom on Thursday were not able to confirm that the winners had been chosen. But Nortel issued a press release Friday saying it had been chosen, and a Samsung representative confirmed Samsung's selection on Thursday.

Helena Lee, spokeswoman at Samsung Electronics, confirmed the company had won a contract from Unicom, although she could not immediately provide any more information. The company will issue a statement on Friday or Saturday following Unicom's official announcement, she said.

Motorola has not yet signed a contract with China Unicom for participation in the project, spokeswoman Angela Low said Thursday.

The bidding overall is to supply equipment that will serve 13.32 million customers in 31 provinces of China, according to a statement last month by South Korean LG Electronics, which qualified for the short list to participate in the bidding. Vendors bid for particular regions; LG bid in eight regions.

"We probably have not won," said a spokesman from LG Electronics who declined to be named.

The China Unicom network will be the first major commercial CDMA network in China. The country's mobile-phone market, the world's second largest, is dominated by GSM (Global System for Mobile Communications) networks, including ones operated by China Unicom.

CDMA will provide additional capacity to supplement strained GSM networks in urban areas of China, said Masood Tariq, Nortel Networks' president for Asia, in an interview Wednesday. Nortel last month was on the list of qualified bidders for Unicom. CDMA allows more customers at a time to use services in a given cell, and offers better quality of service, Tariq said.

"The issue now in metropolitan China is that we're running out of capacity on the GSM networks, so we have to utilize CDMA," Tariq said. Nortel makes both CDMA and GSM networks.

"You're looking at a fairly massive deployment, " Tariq said of the planned Unicom network.

The state-owned carrier, which is the only full-service competitor to China Telecommunications (Group) Corp., will be building out a pilot network it recently acquired from military-linked Great Wall Telecom.

The company expects to attract new users to the CDMA service at the rate of 10 million per year; the Great Wall network had 550,000 customers. China Unicom already operates a nationwide GSM (Global System for Mobile Communications) network.

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