Financial Times China quotes China Unicom's head of group marketing as saying that safety concerns would be a driving force behind sales of CDMA services. Safety? That's right, some marketing campaigns are suggesting that lower-radiating CDMA sets are the phone of choice for a region still emotionally staggered by the outbreak of the SARS virus. The GSM Association has shot back, arguing that using a GSM handset is no more hazardous than a CDMA phone. "In terms of average operating power, the typical levels are quite similar," said Jack Rowley, the association's director for environmental affairs. "For GSM and from the general mobile industry point of view, it is unhelpful for anyone to be suggesting there are risks."
Telecommunications analysts in China said it was unlikely that China Unicom would be forced to stop using low radiation as a major selling point for its CDMA services. Unicom has close links with regulators who are keen to see it prosper, while its main rival China Mobile has little incentive to undermine a service that is seen as posing only a marginal threat to its business.
But in the race for the hearts and ears of mobile-phone users, Unicom does not need to emphasize environmentally friendly, or "green," to beat GSM, since there are many other hard facts.
Though China reached 232 million mobile phone subscribers by the end of May, average monthly new subscribers declined 5.25 million in the first half of this year, following a 4.98 million average in the second half of 2002. In addition, average revenue per unit (ARPU) fell in that period, as did the number of contract subscribers (90 percent prepaid calling card users by the end of 2002), according to data from China's Ministry of Information Industry.
China Unicom has invested $1 billion in CDMA 1X, and is ready to provide 153.6-kbit/second data transmission services that support handheld mail, Internet browsing, games and maps.
Unicom's infrastructure commitment has finally awakened China's handset makers to join CDMA 1X. Korean, Japanese and local handset makers launched CDMA 1X products with features including digital cameras, 15-second video, Binary Run-time Environment for Wireless (BREW) and color display. Lately TI, STM and Nokia have stepped up design activities in this area because the competition will drive down cost and new technology can be applied faster. Will Qualcomm seek a new alliance in China to produce 120 million handsets in 2003? The two brands in China, Nokia and Motorola, say they'll stay with Qualcomm, which is likely to influence the decisions of Chinese handset makers.
It is not Unicom that threatens China Mobile, which holds 85 percent of China's mobile phone market. What really hit China Mobile is that Unicom, with its technology investment, could take away quality users and a high-margin market sector with the full support of telecom equipment and handset makers.
Michael Liu is a contributing editor to EE Times China, part of a joint publishing venture between that company and CMP's Electronics Group.
