Seven telecom equipment vendors have passed the first selection phase in a competitive race to inherit huge network upgrading contracts with China Unicom. The winner is expected to be announced at the start of next year, China Daily was told by sources close to the deal.

The seven companies will showcase their 2.5 generation CDMA (code division multiple access) equipment, or the CDMA2000-1X in different cities and will have to wait for the final bid, sources said.

Two Chinese companies are enrolled in fierce competition with both Shenzhen-based Huawei and ZTE, well known as Zhongxing, and will set up trial operation networks in Nanchang, capital of East China's Jiangxi Province, and Hainan Province respectively.

Other companies include South Korean company Samsung, which will also show its CDMA2000-1X equipment in Shanghai, US companies Lucent and Motorola in Guangzhou and Beijing, Canada's Nortel Networks in Hangzhou and Swedish Ericsson in Chengdu.

The competition among the seven vendors is very fierce, said a spokeswoman for Motorola, as this round of upgrading will have a close relationship with the coming third-generation network.

She said not all of the seven could win, as the operator prefers network consistency.

Samsung from South Korea has paid close attention to the trial and has said the company is lucky to have been selected to show in Shanghai, the major commercial city in the country.

Motorola and Lucent also showed confidence for their networks in Beijing and Guangzhou.

Although the two domestic companies, Huawei and ZTE, have not been selected to play in the biggest cities, home companies are playing a bigger role in the cutting-edge equipment market. In China Unicom's 2G network bidding, only one domestic firm, ZTE, won the bid with all self-produced equipment.

The construction of China Unicom's 2G CDMA network has been finished and 11 companies took part in the project. This network, still applying the 2G technology, will kick off at the end of this year or early next, when network upgrading to the 2.5G will start at the same time, according to the company.

China and the whole world have high expectations for the network, as it will be the first one, which aims to support 15 million users in the initial operation.

It will soon become the biggest in the world with a scheduled 50 million users within three years, according to China Unicom.

The bidding for the first phase of construction earlier this year was extremely fierce with 11 companies jointly sharing the 12.1 billion yuan (US$1.47 billion) in contracts.

Right before the start of the CDMA network, which will cover around 300 cities, China Unicom is selecting partners for the coming operation. The company signed a memorandum of understanding with Telstra, the Australia-based mobile carrier, earlier this month for close co-operations in the CDMA business.

As the country's only mobile carrier that has both CDMA and GSM (global system for mobile communications) networks, China Unicom would learn management experience from its Australian partner who also has two networks.

SK Telecom, the South Korea-based CDMA carrier, also became a partner of China Unicom earlier. According to the rules of the World Trade Organization, overseas telecom carriers will be given the rights to hold shares in domestic carriers. It is widely believed that China Unicom's partners may soon become shareholders of China Unicom.

(China Daily November 26, 2001)