Nokia Siemens, Ericsson May Get Parts China's 3G

Nokia Siemens and Ericsson may play prime roles in expanding China's 3G network.

According to a story in the South China Morning Post, China Mobile soon will announce the winners of its $4.4 billion network tender, and the two companies are expected to receive 10% of the contract each.

"Mainland equipment vendors seem to need foreign research and development resources for next-generation technology," an industry insider told the newspaper.

The Chinese market is an increasingly important one in the wireless industry because of sheer numbers. China Mobile is already the world's largest cellular provider with more than 600 million users, and the country is still experiencing a rapid adoption rate.

Most of the wireless subscribers use entry-level phones, but these customers are quickly upgrading their handsets to more powerful devices capable of multimedia, e-mail, and the mobile Web. For example, In-Stat reports that there are an estimated 400,000 unlocked Apple iPhones in the country, as well as multiple iPhone clones.

The mobile broadband network could play a crucial role in the uptake of more sophisticated handsets, but there's mounting concern about what 3G technology should be used. China Mobile is busy expanding its TD-SCDMA network to 28 cities, and that technology is widely expected to be forced on companies when the government awards commercial 3G licenses.

But some technology companies say the government should open the market to foster competition and innovation.

"The technology will improve when it compete with others," said Frank Meng Pu, Qualcomm's president for greater China. "Just like the competition between CDMA and GSM is driving the improvement of these two technologies."