Vendors set up $100 million joint venture to develop and promote the 3G technology
To mark the official start of the joint activities for 3G/TD-SCDMA mobile communication technology, Siemens Information and Communication Mobile (Siemens mobile) and Huawei Technologies have signed a contract for the formation of the joint venture.
The joint venture will develop, manufacture and market TD-SCDMA technology, for which both companies are together investing more than $100 million. The new company will be based in Beijing, with Siemens mobile holding 51% and the Chinese company 49%.
Lothar Pauly, Chief Operating Officer of Siemens mobile and Yafang Sun, Chairwoman of Huawei Technlogies, were both confident at the signing of the contract that their combined strength and know-how would give TD-SCDMA a powerful push for market success in China.
The signing officially launches the joint development activities of Siemens and Huawei. Siemens mobile already transferred its global R&D, marketing and sales responsibilities for TD-SCDMA to Beijing. Siemens mobile is contributing more than 200 employees, Huawei around 100. In several months time, the joint venture will have 350 employees. In addition to the company headquarters in Beijing, engineers will also work on the development of infrastructure products in Shanghai.
The mobile standard TD-SCDMA, which complements GSM and W-CDMA, is currently being put to the test in several trial networks. The Chinese Ministry of Information Industry allocated a 155 MHz spectrum to TD-SCDMA in October 2002, thus paving the way for the commercial use of the standard in China. Both partners in the joint venture hope that TD-SCDMA will succeed in the Chinese market and convince operators in other countries to adopt the standard. Manufacturing and marketing of the standard will, however, initially be focused on China. The technology can be operated either as a standalone network or used to supplement GSM or UMTS networks in order to cope with heavy data traffic. The aim is to offer the first products of the joint venture in the coming months and to participate in the official 3G trials with operators set up under the governance of the Ministry of Information Industry (MII) within this year.
Both companies bring to the joint venture decades of experience in telecommunication technology. Siemens started its development in TD-SCDMA back in 1998 and has to date invested more than EUR 170 million in this technology. With several test networks running in China, Siemens has proved that this technology is fast approaching market maturity. Siemens will be contributing development know-how and products to the joint venture as well as 200 Siemens employees already working in Beijing. Huawei is contributing around 100 employees to the joint venture. Alongside development, it will promote marketing and sales of the mobile technology in the Chinese market.
Lothar Pauly of Siemens mobile said: "We are proud to have found in Huawei a partner who shares our vision for TD-SCDMA. Together, we will make the standard a success in China. It is Siemens’ declared aim to become the 3G market leader in China." With 270 million mobile phone customers today, China is the world’s largest mobile communication market and is expected to grow faster than the world market for several years.
"We are looking forward to working together with Siemens mobile in the future, a leading mobile communications company," expressed Yafang Sun of Huawei. "The cooperation will drive forward the commercial use of TD-SCDMA. Both companies will also be able to optimize their development costs. Huawei works with the top companies in the telecommunications industry. We develop and supply our leading 3G products and solutions worldwide."