"The worldwide prominence of WCDMA and its well-trodden upgrade path from GSM will give that standard the heaviest weight in China's 3G market," said Beijing -based Norson Telecom Consulting in a recent report.

"Therefore, even though its initial 3G revenue is likely to be slow because of the anticipated license release schedule, Ericsson will eventually be able to capitalize on its strengths to improve revenue and increase its share of the Chinese mobile telecommunications market."

Ericsson is the world's largest vendor of WCDMA equipment, with a 35 per cent share. Ericsson was the prime supplier to 60 of the 109 commercially launched WCDMA networks worldwide by the end of September 2006.

Overcoming challenges

Norson's report indicated that Ericsson still faces some challenges in China's telecom market such as China's increasing regulatory support for TD-SCDMA, which could undermine WCDMA's dominance as well as Ericsson's competitiveness.

Yet, "the vendor also has many opportunities to develop new revenue streams," it said.
In September, Ericsson restructured its global operations into three units: networks, multimedia and global services.

Olsson indicated that the convergence of networks would bring huge opportunities for Ericsson's newly formed Multimedia unit.

"As we embrace the new era of the Digital World, we foresee the convergence of telecom, Internet and media as enabled by what we call the 'Full Service Broadband,' which will eventually support any multimedia services to any screen of your choice, anytime and anywhere," he said.

"We already see a big demand for advanced services and applications from the advanced markets within China, which will definitely drive the development of new revenue generating multimedia services, beyond the currently available basic voice and rudimentary data services."

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