More tenders will be launched by telecom operators as the 3G era approaches.
Shanghai. December 15. INTERFAX-CHINA - Chinese telecom equipment suppliers, who lagged behind their foreign rivals in the 2G era, are set to dominate China's 3G market, industry analysts told Interfax recently.
"The take-off of 3G is bringing domestic telecom equipment suppliers, in particular system and network coverage equipment suppliers, more opportunities to beat their foreign rivals and capture more market share," Shi Hong, an industry analyst with Industrial Securities, said.
According to Shi, Chinese suppliers have won greater shares than their foreign counterparts in the telecom equipment tenders launched by China Telecom and China Mobile so far. He attributed this to government support for domestic players, as well as the spur that the Chinese-developed 3G standard, TD-SCDMA, has provided to Chinese manufacturers.
In China Telecom's first CDMA equipment tender in August this year, ZTE Corp. and Huawei Technologies won a combined market share of between 50 percent and 55 percent. "Winners of China Telecom's CDMA tenders will be well placed to obtain more contracts from China Telecom when it upgrades its CDMA network to the 3G CDMA2000 standard," Shi said.
Meanwhile, in China Mobile's two TD-SCDMA equipment tenders, the first of which was held early last year and the second in November this year, five Chinese equipment suppliers, namely ZTE, Huawei, Datang Mobile, New Postcom, Putian Telecommunications and FiberHome Technologies, won a combined market share of 88 percent.
"More tenders will be launched by telecom operators as the 3G era approaches," Liu Jun, an industry analyst with Ping An Securities Co. Ltd., said.
In September this year, China Unicom asked companies to submit technical specifications for a tender for 70,000 WCDMA base stations to be installed in more than 200 Chinese cities. The company is currently deploying WCDMA trial networks in the eight cities of Shanghai, Shenzhen, Foshan, Liuzhou, Baoding, Wuxi, Zhenzhou and Wuhan, with about 100 base stations to be installed in each city. Ericsson, Huawei, Nokia Siemens, ZTE, Alcatel-Lucent and New Postcom took part, with China Unicom ranking Ericsson top in terms of technical indicators. The six manufacturers will submit their quotations in the tender, which insiders expect to take place in late December.
"Even though Ericsson will probably win the greatest share of China Unicom's forthcoming WCDMA tender, Huawei and ZTE still have the chance to obtain a combined share of 40 percent," Liu predicted. A research report by China Securities on Dec. 10 predicted that ZTE's share of the tender will be between 10 percent and 15 percent.
The report also predicted that from 2008 to 2010, fixed-asset investment in the telecommunications industry is expected to reach RMB 900 billion ($131.44 billion), peaking in 2009.
Interfax commentary: As virgin territory for 3G suppliers, competition in China will be fierce. Foreign equipment suppliers are eagerly awaiting China Unicom's WCDMA tender, in which they expect a larger market share than in China Telecom and China Mobile's past tenders. For example, it has been reported that Ericsson is aiming to capture at least 30 percent of China Unicom's WCDMA equipment tender, while Nokia Siemens has also set its sights high. Some industry analysts have told Interfax that price wars will be far more brutal than in China Mobile's TD-SCDMA tenders, as the government will take a more hands-off approach.
The rapidly spreading popularity of group discount sites in China is giving physical small and medium sized enterprises (SME) across the country a way to market themselves online. The unique business model may prove a serious new competitor in China’s lucrative online shopping sector.
