China Telecom, the largest fixed-line telecommunications operator in China, is quickening its steps to deploy the CDMA network in a bid to operate the CDMA business in October 2008 as planned.

China Telecom, which was encouraged to take over the CDMA business from China Unicom in the nation's telecoms industry reshuffle, is scheduled to unveil the result of the bidding for procurement of CDMA equipment next week, revealed people close to the company on August 15, 2008.

This round of bidding invitation, which was boasted to be larger in scale than any other one around the world in recent years, has attracted six telecommunication equipment providers like Alcatel-Lucent (NYSE: ALU), Nortel, Huawei Technologies Co., Ltd., ZTE Corporation (SZSE: 000063, SEHK: 0763), Motorola, and Samsung.

The commercial evaluation of the CDMA equipment is in progress, said an industry insider, noting that the technology evaluation has been completed.

China Telecom is likely to promote CDMA mobile phone numbers starting with 186 and 185 after getting the CDMA network. Previously, China Telecom has submitted an application to the Chinese regulators, asking for the rights to use 821- 835MHz/866-880MHz frequencies and numbers prefixed with 186 and 185.

This bidding invitation is part of the to-be-operator of the CDMA business's efforts to expand coverage of the CDMA networks in 81 key cities across the nation.

China Telecom expects to upgrade the existing degraded CDMA network into 3G equipment this time. The scheduled upgrade, pointed out a market observer, will help telecommunications equipment makers rebuild their presence in the nation's CDMA market in the future.

"Usually, an existing network in a city will be expanded on the basis of the adopted equipment. Therefore, the aged CDMA equipment in the urban areas is likely to be replaced by new ones purchased from the same producers. As for the old equipment, it will probably be moved to the suburb and rural areas," explained the market observer.

The six bidders, most of which are leaders in the global CDMA equipment industry, declined to say how much of the cake they are eyeing.

Notably, Huawei, which took an only 2% share in the Chinese CDMA market in 2007, was rumored to have send batches of equipment to the CDMA equipment buyer for free.

By sending equipment, Huawei is likely to snatch part of 40% of the share in the domestic CDMA market held by Motorola and Nortel, however, it will find it hard to challenge ZTE, which grasped the 32% share, according to Guotai Junan Securities Co., Ltd.

(USD 1 = CNY 6.88)

Source:SinoCast