O2 owner to help out Chinese go 3G

THE PARENT of UK mobile operator O2 (affectionately known as Oh Dos now that it is run by Spain's Telefonica) has bought a strategic chunk of China Netcom. But that will end up as a stake in China Unicom.

China recently regrouped its telecoms companies into three entities in an effort to shake up the mobile market. The idea was to challenge the dominance of China Mobile which has over 70 per cent of the market.

Fixed line operator, China Netcom, is to inherit the GSM network previously run by China Unicom. Indeed the new combined entity might be just called Unicom.

Anyway, Telefonica's obvious expertise lies in running 3G networks based on W-CDMA technology. So it looks like Unicom might get a 3G licence to run a W-CDMA network.

That's one in the eye for Vodafone which would dearly like to help the Chinese benefit from its expertise in running W-CDMA.

Currently bits of the UK Vodafone network offer 7.6 Mbit/s throughput whereas the home spun Chinese TD-SCDMA network is still apparently stuck at 384 Kbit/s.

Unfortunately China Mobile's CEO, Wang Jianzhou, recently revealed that his company will get probably get lumbered with TD-SCDMA. [see INQ passim]

The only ray of hope is that China Unicom was previously permitted to run two separate networks – one using GSM and the other using Cdmaone.

Still, if Unicom gets to build a W-CDMA network first, Telefonica will have scored one over Vodafone which has held a circa five per cent share of China Mobile since 2000. µ

See Also
Chinese Telcos reshuffled
China's 3G strategy revealed