Finnish telecoms giant Nokia has signed a deal with the State-owned China Putian Corp to form a joint venture to develop and market 3G (third-generation) mobile telecommunications technology.

The venture, pending government approval, will involve an investment of 900 million yuan (US$111 million).

Putian, a major Chinese telecoms equipment maker, will have a 51 percent stake and Nokia 49 percent.

The focus will be on research and development, manufacturing and the marketing of 3G equipment and solutions. The venture will be based on the European-initiated WCDMA standard and the Chinese TD-SCDMA standard.

Nokia's joining the TD-SCDMA camp underlines the growing interest of global major telecoms giants in TD-SCDMA.

Unlike the other two major global 3G standards WCDMA and CDMA 2000 the Chinese standard TD-SCDMA remains an unproven technology as it is not yet in commercial use. However, it has been gaining momentum in recent months.

The joint venture between Putian and Nokia is expected to launch commercial products based on WCDMA and TD-SCDMA next year, said David Ho, president of Nokia (China) Investment Co Ltd.

All products will use the "Potevio" brand, owned by Putian.

Nokia will also sell WCDMA products under its own brand in China if operators get the green light from the government to build WCDMA networks.

Germany's Siemens already has a US$100 million-plus joint venture with China's top telecoms gear maker Huawei Technologies, focusing on TD-SCDMA.

Alcatel has tied up with Datang for a similar deal. And, most recently, Ericsson has teamed up with China's No 2 telecoms equipment maker ZTE to develop TD-SCDMA.

The support from foreign giants underscores the increasing anticipation that TD-SCDMA will eventually become a commercial reality in China.

Yesterday, TD Tech Ltd, the joint venture between Siemens and Huawei, said it has launched a full set of commercial network products based on TD-SCDMA.

The firm will showcase these products in a major telecoms show to be held next week in Beijing, it said in a statement.

The biggest remaining problem for TD-SCDMA is immature chips and mobile phones based on the standard.

Government officials have been calling for an industry-wide effort to boost the maturity of TD-SCDMA mobile phones.

Major TD-SCDMA chipmakers have promised to offer mature TD-SCDMA chips by the end of this year, which is expected to facilitate the licensing of 3G technologies in China.

Jiang Yaoping, deputy chief of the Ministry of Information, yesterday reiterated in a signing ceremony for the joint venture between Nokia and Putian, that the ministry will make a proposal for 3G licensing this year. Many industry observers believe licensing could occur around March next year.

Putian last year signed a memorandum of understanding with Canadian communications firm Nortel Networks for a joint venture. But Tao Xiongqiang, vice president of Putian, said the idea had been dissolved.

"Putian and Nortel have reached a consensus that a joint venture is not the best option for us," he said.

(China Daily October 14, 2005)