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China Unicom GSM Mobile Telecoms Network, China




Key Data


Rolling out a GSM (Global System for Mobile Communication) network across China is a challenging task. China United Telecommunications Corporation Beijing (Unicom), China's second largest telecommunications company, has used a whole host of suppliers to do just this. The state-sponsored organisation, China Unicom floated shares on the New York Stock Exchange at the end of June 2000 with great success. China has one of the world's second largest number of mobile subscribers behind the USA with 58.3 million subscribers. China Unicom is behind near monopoly China Telecom in terms of mobile subscribers, with a 10% share. Forecasts from the Telecommunications Industry Association indicate that this number is going to increase further from 132 million at the end of 2001. Indeed, experts suggest that China will soon draw level to the USA in numbers of subscribers.

China Unicom rolled out a GSM network across the Beijing area and neighbouring provinces. Almost all major cellular infrastructure providers were involved, and multiple small contracts have been placed over the years. Reducing the number of large contracts will ensure that China Unicom will gain the capacity for a further 4.8 million subscribers. The latest deal, in June 2000, was won by Motorola for the further expansion of the GSM network into Jiangsu, Hunan, Guangxi and Hubei provinces. The combined value of the contracts was $230 million.

A major challenge for China Unicom is not only subscriber numbers but spend per subscriber. The company needs to win some of the heavy users away from China Telecom. Further services such as high speed data networking and WAP are being introduced for this purpose.

THE NETWORK

China Unicom's network is made up of every supplier's base stations, switching centres and software. It is generally considered that Motorola has the strongest position in the market followed by Ericsson and Nokia. In June 2000, however, China Unicom signed a preferred vendor agreement with Lucent Technologies. This will certainly help Lucent win more contracts in China, but other vendors will still complete successfully.

GSM NOT CDMA

China Unicom's strategy for the next three years will be based solely on GSM, following speculation that it might be looking to introduce CDMA. CDMA has a more efficient use of bandwidth, but GSM is the dominant global technology, and for roaming purposes in China and elsewhere GSM is the technology of choice.

This has caused headaches for some US suppliers, especially Qualcomm, which has patents on CDMA, but they are still in a good position to help China Unicom migrate its network from GSM through WAP and GPRS (General packet Radio Service) to 3G services.

WAP IS THE FIRST STEP

WAP trials were carried out by China Unicom across 20 cities in China during May 2000. The services were offered to between 10,000 and 20,000 people in each city including Shanghai, Beijing and Guangzhou, China's three largest cities. The network was upgraded by Nokia at a cost of $10 million per city, with internet-ready handsets manufactured by Nokia and Ericsson. China Unicom successfully managed to persuade some of China's leading internet content providers, such as Sina.com and Sohu.com, to provide content written in the programming language used for WAP phones - Wireless Mark-up Language (WML).