code division multiple access, or CDMA
technology received a boost, after signing a deal for a new joint venture
with China Unicom
Qualcomm and China United Telecommunications Corp. have been working
together for some time, and since the partners launched a CDMA mobile phone
network in China last year.
Qualcomm has garnered strong revenues from close to seven million
subscribers since the launch of its CDMA service in China last year. The
venture expects to add 13 million new CDMA subscribers this year, and
another seven million new subscribers in India. Qualcomm has said it expects
close to 110 million CDMA phones to be sold around the world in 2003.
One of the objectives of the new Qualcomm-China Unicom joint venture is to
create new software applications that will be used by the partners expanding
mobile subscriber base. The venture is said to be capitalized with an
initial investment of 100 million Yuan, or more than $12 million, and may
consider a stock offering in the future.
Qualcomm’s generates its revenue from selling both the microchips inside the
CDMA phones and the royalties on patents used in CDMA equipment.
Just last week, Qualcomm said that China United Telecom began the first
commercial trial of wireless technology known as GSM1X in Suzhou in the
Jiangsu province. The new wireless solution aims to enable mobile networks
using GSM technology to upgrade to a new high-speed version of CDMA, known
as CDMA 1X.
On Wednesday, Reuters reported that Qualcomm is meeting with China Telecom
and China Netcom about using the 3G standard for next
generation mobile phone services.
China Telecom and China Netcom are expected to received mobile licenses from
the Chinese government, either later this year or in early 2004, which will
allow them to compete with China Unicom and China Mobile. It is still
unclear, if China will migrate to 3G technology, and even if it does, it
wont be before well into 2004, before customers will have a viable
commercial 3G offering.
The new Qualcomm-China Unicom venture will upgrade CDMA data services in
China through the use of its BREW service. Qualcomm and China Unicom are
working with BREW Wireless Technologies Ltd., to foster development of new
CDMA wireless data applications enabled by Qualcomm’s Binary Runtime
Environment for Wireless (BREW) platform. Those new data applications are
expected to include wireless downloadable games and a variety of specialized
business applications, including position location.
The new company will offer developers BREW training and technical support,
as well as creating a developers lab to create, test and commercialize a
variety of new applications. Qualcomm is already working with Brasilcel, KTF
of South Korea, KDDI of Japan overseas, and Verizon Wireless
, U.S. Cellular
in the U.S.
on a variety of BREW-based services.