Olivier Baujard, Alcatel's chief technology officer, said he is very confident about the Chinese market and that investment in R&D is likely to go up this year, in an interview with China Daily.

The French company pumped about 100 million euros (US$130 million) into R&D in China last year.

"We are going to enhance our research and development here if everything goes well," he said.

According to Baujard, domestic R&D will mainly focus on wireless telecommunication, broadband, third generation (3G), NGN (next generation network) and IMS (IP-based multimedia sub-system).

"R&D in China is becoming increasingly important for Alcatel," Baujard said.

Company figures show R&D in China constituted more than 10 per cent of the firm's total last year.

Alcatel realized sales of 12.3 billion euros (US$15.9 billion) over that period. A total of 1.7 billion euros (US$2.21 billion) was set aside for R&D globally.

At the Sino-French Economic Seminar early last week, Alcatel introduced a series of new services to the Chinese market, including triple play and managed services for enterprises.

With triple play, users can enjoy services based on voice, data and multimedia. The devices include high definition TV, video on demand, gaming and messaging.

"I believe that China's telecoms market is reaching a critical point where we will see the convergence of fixed-line and mobile technology," he said.

Licences for (3G) wireless communications are expected soon, handing even more exciting opportunities to telecommunications firms.

Baujard said that Alcatel is in discussions with regulators in Europe about TD-SCDMA (Time Division Synchronous Code Division Multiple Access) technology.

Alcatel teamed up with Datang Mobile to work on the Chinese 3G standard in November last year.

But Baujard believes that one of the best ways to encourage use of TD-SCDMA technology is to first launch it in China.

"Successful launching and operation is very important to pave the way for the technology to go abroad," he said.

European telecoms operators are very interested in TD-SCDMA as many of them have the frequency resources for the technology, he added.

He is confident that TD-SCDMA will spread out of the domestic market given the fast development of the industry, strong government support and the formation of a complete industrial chain.

The homegrown 3G technology is believed to be able to meet the requirements for commercial use by the end of June.

(China Daily April 11, 2005)