Telecom equipment makers are working hard to ensure they get the advantage in the third generation (3G) market before it really takes off, this is despite the delayed release of 3G mobile telecommunications licences in China.

The recent flurry of visits to China by foreign telecom company CEOs and changes to these firm's China development strategies are a clear illustration of the importance they are attaching to this.

Japanese giant NEC Corporation's Senior Vice-President Ben Nakamura's comments highlight this recent trend.

"We've finished our readjustment in China to enhance our competitiveness," said Nakamura, whose company is keen to win a big share of China's 3G market.

NEC has readjusted its business framework in China, concentrating on the research and development of 2.5G and 3G-related terminal handsets and network equipment, said Nakamura.

NEC Telecommunications (China) Co Ltd was launched late last month through restructuring of its solely owned enterprises and joint ventures in China in order to help the firm win a greater foothold in China.

Newly appointed NEC (China) President Brian Lu predicted that NEC's revenue from the Chinese market will account for a 40 percent of NEC's total overseas market share in three year's time.

"3G is the key element to ensure the realization of the target," Lu said.

NEC telecommunications (China) Co Ltd is not alone in hoping to cash in on China's 3G industry.

Major foreign telecoms equipment makers, such as Motorola, Nokia, Siemens, Nortel Networks, Ericsson, Lucent and Alcatel have invested large amounts of money in 3G R&D in China.

Nortel Networks announced late last month that it will build a headquarters and a research and development center to strengthen its R&D capabilities in China with an investment of US$200 million between 2004 and 2006.

US-based Motorola Chairman and Chief Executive Officer Ed Zander said last month on a visit to Beijing that the firm planned to merge its 19 China-based R&D centers into a single R&D firm, with an investment of US$90 million.

Finnish firm Nokia has also drawn up plans to expand its R&D capabilities in China.

Nokia intends to establish a new R&D facility to support CDMA (code division multiple access) technology and product development.

The new facility will "leverage Nokia's existing global CDMA competency to build a team of local skills specializing in the CDMA protocol," Nokia said.

It will also expand Nokia's global research network and create new platforms for technology transfer and local skills development, in addition to catering to the needs of the Chinese market.

Siemens has vowed to become one of the top two equipment suppliers in China's future 3G wireless communications market, a senior company executive said.

"It's our strategic goal to become one of the top two suppliers in China's 3G market," said Gao Yan, senior vice-president of Siemens Ltd China's Information and Communication Group.

Siemens' combined strength in both WCDMA and TD-SCDMA standards will ensure the company takes the lion's share of China's costly 3G contracts, he said.

Siemens has developed the TD-SCDMA technology in partnership with Chinese firm Datang.

In another development, domestic firms Huawei and ZTE have also ploughed hundreds of millions of US dollars into 3G R&D.

Huawei Vice-President Xu Zhijun said the company has five research institutes in the United States, Sweden, India and Russia.

Huawei statistics showed that its end-to-end solutions based on CDMA 2000 had been adopted by more than 40 telecom operators in over 30 countries and regions.

"Our leading technology is a result of our continued emphasis on the technology and efforts to meet the customers changing demand," Xu said.

Analysts believe Huawei's overseas expansion will help the company carry out its 3G strategies in China.

For example, Huawei is engaged itself in the development and research of all the 3G-related equipment and products in order to maintain its leading position.

Huawei has enhanced its co-operation with US-based Qualcomm Inc to roll out more solutions and services based on CDMA networks, including CDMA 800MHZ and CDMA 450MHZ, according to Xu.

Huawei signed a series of contracts last year with many foreign telecom operators to provide CDMA equipment and solutions, including firms from Algeria, Nigeria, Russia and India.

Huawei spokesman Fu Jun said the company has already begun producing handsets for use with mobile systems that use the CDMA-1X standard backed by US-based Qualcomm Corp.

Fu said Huawei is also developing handsets for WCDMA, the European standard Hong Kong's Hutchison Whampoa Ltd is using in its 3G service now on offer in Britain and Italy.

He added WCDMA handsets are being designed in various partnerships with Matsushita Electric Industrial Co's Panasonic, NEC Corp and Infineon Technologies AG.

(China Daily June 8, 2004)