Qualcomm Inc (QCOM)

[rob v]

Siemens expects to win 3G game

2003-7-31 11:41:14
Despite vague market prospects surrounding the roll-out of third-generation (3G) mobile telecommunications, Siemens Shanghai Mobile Communications Ltd (SSMC) expects to be one of the new game's winners.

"Yes, it is a new game, which will be played according to brand new rules," Peter Borger, SSMC president, told China Business Weekly in the wake of the firm's 10th anniversary.

"But I am sure Siemens will do a good job, as we have done in the past. We have spared no efforts to be prepared."

Borger has reason to be confident. Siemens supports both the WCDMA (wide code division multiple access) and TD-SCDMA (time division synchronous code division multiple access) 3G mobile telecoms standards.

Also, the German-based firm has invested heavily in both standards.

"Our preparations are based on our commercial judgments after considerable market analysis," Borger said.

"We have been prepared in terms of investments and technologies for the two standards, which are very likely to win licences from the Chinese telecoms authorities.

"Once the 3G licences are granted, we are sure we can hold the lead position in the race."

Borger, the mastermind behind Siemens' mobile phone business in China, said the firm has invested, in the first phase, US$30 million to update its manufacturing facilities to be ready to make 3G terminal products and networks equipments.

"Our experiences in Europe have illustrated the key to the success of 3G mobile telecoms is the speed of roll-out of terminal products. That is why we have invested so much," Borger commented.

The firm's investment plans for the second phase will not be completed until the 3G licences are granted, Borger said.

Siemens supports both WCDMA, which is popular in Europe, and TD-SCDMA, which is the internationally recognized 3G standard developed by Datang Telecoms Technology and Industry Group, a Chinese telecoms conglomerate.

Siemens is among the leaders in Europe's WCDMA 3G telecoms sector. The firm has signed about 20 WCDMA-related contracts in the world.

One of Siemens' major projects in China is the co-development and application of TD-SCDMA, which is being backed by the Chinese Government.

TD-SCDMA is considered an economical choice for China and many European countries interested in upgrading their current GSM (global systems for mobile communications) networks to 3G.

Compared with WCDMA, or wide-band CDMA, TD-SCDMA provides better support for Internet access and data transmission.

WCDMA, meanwhile, provides better support for multimedia functions on 3G handsets.

Established in 1993 as a Sino-German joint venture between Siemens China Ltd and three Chinese partners, SSMC is one of Siemens' three major manufacturing bases for mobile phones.

It was also one of the first high-tech companies to support the establishment of the Pudong Development Zone.

SSMC has 2,600 employees in China developing, manufacturing and marketing mobile phones and mobile-network products, and designing, engineering and installing complex mobile systems.

The company also provides customer services across China.

SSMC has completed 34 GSM mobile networks for China Mobile Communications Corp and China Unicom covering 26 provinces and municipalities.

SSMC turned out 14 million units of mobile phones in the 2001-02 fiscal year.

"Handsets produced by SSMC are not only meeting the needs of the local market, but also are being exported to important overseas markets, such as the United States and Europe," Borger said.

"Last year, 8 million units of mobile phones were sold abroad, and the number will be 9 million for this year."

SSMC is responsible for one quarter of Siemens' global production volume.

With the significant expansion of production capacity and the development of the new generation of mobile phones, SSMC's position in the global and Chinese mobile communications markets has been consolidated.

The firm's sales have doubled almost every year since 1993, and sales in the 2001-02 fiscal year were worth 12 billion yuan (US$1.45 billion).

http://www.tdscdma-forum.org/nenglish/readnews.asp?id=1779