Samuel May, US Bancorp Piper Jaffray's managing director, said that China's pending approval to enter the World Trade Organization and the recent successful bid to host the 2008 Summer Olympics in Beijing are among the factors that fuel the demand for the significant infrastructure build-out in China.

May's research team recently returned from an extended stay in Asia, where they sought to uncover the major issues impacting the development of wireless communications in China. Investment research firm Piper Jaffray published May's analysis Tuesday.

The Chinese government plans to spend 151 billion U.S. dollars to expand and improve its telecom infrastructure by 2005. A five-year plan calls for an increase in fixed-line capacity to support 220 million fixed-line users, and an increase in mobile capacity to support between 260 million and 290 million mobile users.

May said that he believes China will also become a meaningful innovator in the development of wireless technology.

On the eve of the country's entry into WTO, May said, the ability of foreign vendors to invest in local ventures in China presents obvious opportunity as well as some risk.

"We believe strong domestic partnership with local suppliers and manufacturers will be key in establishing distribution channels and political capital in China -- two critical tools necessary to capitalize on the world's largest telecommunications infrastructure build-out to date," the analyst said.

May estimates that worldwide wireless subscribers will grow from roughly 730 million by the end of 2000 to 965 million as of year-end 2001. Of this growth, May believes that slightly more than 40 percent will come from Asia-Pacific, which he estimates should account for more than 327.4 million subscribers by the end of 2001.

According to May's research, the Asia-Pacific region should represent nearly 34 percent of the world's wireless service subscriber base, or 403 million subscribers, by the end of 2002.

(People's Daily 08/08/2001)