The expected launch of third generation (3G) mobile communications in China is being eagerly awaited by US semiconductor company Agere Systems, which is aiming to take advantage of the launch with its Chinese partners.

John Cummins, vice-president of Agere System's China operations, said his company already launched its dual-mode handset solutions in the domestic market, and expects to have some Chinese customers on board by the end of the year.

He believes the dual-mode system, which is based on the 2.75-generation EDGE and 3G WCDMA standards, will enter the mainstream in the 3G era.

Since Chinese operators may only offer 3G services in urban areas due to the huge investment involved, many customers will not be able to use 3G features like fast video downloads, so the 2.75G EDGE standard will serve as a good compromise for those in need of high-speed data downloads.

WCDMA downloads data at 384 kilobits per second, while EDGE's speed stands at 220 kilobits per second.

And the cost of an EDGE network is far smaller, as it only requires the upgrading of the existing 2G network, rather than the building of an entirely new 3G platform.

A report by the market research house Strategy Analytics suggested WCDMA-EDGE dual-mode phones will become the sector which presents the greatest growth opportunities in the 3G handset market over the coming year, with 40 per cent of the market taken up by such phones by 2010.

The New York-listed Agere expects to have customers for its dual-mode solution by the end of the year.

Cummins believed the large-scale adoption of the new system will happen in 2006, as operators and phone makers need time to prepare. But even more important is when the Chinese Government will start issuing 3G licences.

Despite the promise of 3G, Agere will adopt a practical approach in the domestic market with its focus on 2G and 2.5G phones.

The US firm is currently working with two local handset makers - Xiamen-based Amoi and Beijing-based Capitel.

According to Sinomarket, which monitors the domestic market, Agere was the fastest-growing player in the handset solutions business last year, with its market share rising from 5.5 per cent in the fourth quarter of 2003 to 10.2 percent in the third quarter of 2004.

Cummins said it was necessary to gain more local customers, but of more importance is finding local partners with ambitions to develop high-end products.

There are 135 to 150 new models released into the market each year, but only a few of them make it, so Agere will work closely with customers to design products catered to the market's needs.

Globally, Agere is partnered with Samsung Electronics and NEC, both rising stars of the world's mobile phone making business.

Agere will also increase its number of research and development (R&D) staff in China, a field in which half of all Agere's staff work.

Cummins said his company plans to up R&D spending by 20 per cent this year.

(China Daily March 7, 2005)