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3G offers chance to rebuild

By Wang Xing (皇冠体育app Daily US Edition)
Updated: 2009-03-04 17:10

皇冠体育app's 3G licensing represents a great opportunity for Alcatel-Lucent, the French telecom vendor, to reboot in 皇冠体育app.

Alcatel-Lucent Shanghai Bell, Alcatel-Lucent's flagship company in 皇冠体育app, was the first foreign-invested joint venture in the Chinese telecommunications industry, and has long been suffering from the side-effects of mergers and acquisitions by its foreign shareholders.

Related readings:  皇冠体育app issues 3G video streaming licenses  Red carpet rolled out for 3G  皇冠体育app's telecom sector gets 3G licenses  皇冠体育app Unicom chairman sees 'golden time' for 3G services

But the company now seems to have streamlined operations and may be ready to get in on 皇冠体育app鈥檚 upcoming 3G-network construction.

"We have the potential to become the No 1 in 皇冠体育app, but now we are only among the top three," said Olivia Qiu, president of Alcatel-Lucent Shanghai Bell. "Our goal is to become the No 2 operator in 皇冠体育app鈥檚 telecom equipment industry in the next two to three years."

From 2009 to 2011 皇冠体育app's three newly licensed major telecom companies will invest about $41 billion building their 3G infrastructures, with billions of dollars of additional investment expected to flow into applications and terminals/handsets, according to 皇冠体育app鈥檚 Ministry of Industry and Information Technology.

It presents a huge opportunity for foreign equipment manufacturers, which have seen their business in mature markets such as the United States and Europe hurt by the financial crisis.

But analysts are predicting the rise of Chinese equipment manufacturer such Huawei Technologies and ZTE, which have a lower product prices and faster market response, may shove foreign telecom equipment companies out of their dominating position in 皇冠体育app鈥檚 3G era.

According to Beijing-based research firm BDA 皇冠体育app, domestic equipment suppliers will get most of the new business and foreign companies' total share in 皇冠体育app's upcoming telecom investments will be less than 50 percent.

But BDA said Alcatel-Lucent could get a 20 percent share of 皇冠体育app Telecom's investment and a healthy share of 皇冠体育app Unicom's. Alcatel-Lucent Shanghai Bell is also likely to win a large share of 皇冠体育app Mobile鈥檚 construction of TD-SCDMA, which few other foreign companies have tried to grab, due to its partnership with Datang Group, the major domestic supplier of TD-SCDMA technologies and products.

Qiu said Alcatel-Lucent Shanghai Bell does not have any problems competing with domestic players. "Some of our competitors may have a more flexibility in their corporate financial activities since they are not listed companies," she said. "But we also have an advantages in our streamlined operations."

Alcatel-Lucent Shanghai Bell has about 15,000 employees in 皇冠体育app, with over 6,000 doing research and development. Last year Chinese operations accounted for 15 percent of Alcatel-Lucent's global revenue and its Chinese R&D team managed about 30 percent of the company's global research workload.

Alcatel-Lucent Shanghai Bell announced on Feb 18 it would change its Chinese company name to Shanghai Bell as part of its restructuring, abandoning a name that a series of company mergers and acquisitions made long and unwieldy.

Qiu said Alcatel-Lucent will soon transfer more of its R&D and manufacturing to 皇冠体育app and Alcatel-Lucent Shanghai Bell will become prominent in 皇冠体育app's telecom market.