Ericsson or return to China Telecom CDMA market, awaiting the upgrade

Although we have now with China Mobile (00941.HK) has no business ties, but may soon have this business." Recently, in the CDMA Development Group (CDG ) at an industry gathering, Ericsson, surprisingly, in which Ericsson's China chief technology officer Ken Zhang said in his speech this. According to him, Ericsson was originally CDG bodies, but drop out, only to return to it now.

beginning in 2005, based on future technology trends and market structure of the judge, Ericsson bets from around the world began to WCDMA, and gradually withdrew from the CDMA market. China's market, Ericsson's CDMA market is basically following the withdrawal by the ZTE (000063.SZ) to take over, become a mere Ericsson to provide GSM and WCDMA / LTE suppliers.

However, in the past year, the telecom market situation has undergone major changes. July 2009, Ericsson invested 1.13 billion U.S. dollars, beat Nokia Siemens, Nortel acquired the LTE and CDMA business, this means that Ericsson regained the CDMA product lines.

but Nortel's LTE and CDMA operations mainly in North America until February of this year, Mats H Olsson, President of Ericsson China, in the acceptance of "First Financial Daily" reporters also said Ericsson has no plans to CDMA products in the Chinese market.

Zhang Ken said, will depend on whether or not to launch CDMA products in China market. He called the opportunity to refer to China Telecom (00728.HK) whether the network will further upgrade and replacement.

According to Zhang Ken introduction, if China Telecom will use the existing CDMA REV A version of the telecommunications network, Ericsson will certainly not intervene, because the upgrade to REV A version, as long as the device software upgrade , does not require the purchase of new equipment and replacement, if necessary to further upgrade China Telecom to CDMA REV B, and LTE, then, Ericsson are likely to consider entering.

in accordance with the current CDMA network technology evolution path, from the 3G version of CDMA 1X EVDO, the next step will be to upgrade to CDMA REV A, then the CDMA REV B, then to the LTE, China Telecom have jointly Some equipment manufacturers began test LTE network.

fact, Ericsson challenges in the Chinese market to some extent also to accelerate the strategic adjustment of Ericsson. Ericsson is the largest customer in China, China Unicom (600050.SH), but according to China Unicom's earnings, its capital expenditures in 2010 than in 2009, down 34.7%.

Ericsson though is China Mobile's TD equipment suppliers, but market share in the TD is still limited to single digits, is very limited. In contrast, all three standards covering the Chinese equipment manufacturers Huawei and ZTE are to achieve rapid growth.

3G licenses, China market status in the global telecommunications market to further improve, which is Ericsson CDMA in China can not ignore one of the reasons. According to CDG chief operating officer James Person, at present about 500 million worldwide CDMA subscribers, while China Telecom is expected to reach 1 million users by year-end, which means that China Telecom will become the world's largest CDMA operator, and win the global CDMA market at least 25% share.