Supporting all three globally recognized standards of next-generation wireless telecommunications will not diminish Nortel Networks' core competitive strength, instead, it will benefit the Canadian telecoms giant, suggests the firm's top executive.

"The answer is totally the opposite," Frank Dunn, Nortel's president and chief executive officer, told China Business Weekly last week.

Nortel, he added, will not be wasting its energy by focusing on all three third-generation (3G) - TD-SCDMA (time division synchronous CDMA), WCDMA (wide code division multiple access) and CDMA 2000 (code division multiple access 2000) - mobile telecoms standards.

"In fact, the three standards share tremendous similarity in terms of core technologies. The core networks for a wireline customer, for broadband CDMA and for a CDMA customer are almost the same.

"Also, as we are involved with the base station, (we found) 80 per cent of the components for the base station are suitable for CDMA and WCDMA. The reason we are now doing a good job on WCDMA is because we have many years of CDMA experience," Dunn said.

"That is why we think we will benefit, rather than lose, by getting involved in the three standards." Dunn predicts all three standards will succeed in the Chinese market.

The success of the standards, aside from technology, will be the result of sound business strategies and the Chinese Government's decisions, Dunn said.

"Nortel will continue supporting the standards. Do we have a preference? No. Each standard has its own technological niche, and nowadays there is much debate as to which one is more advanced," Dunn said.

"But ... as time passes by, and with the evolution of technology and market strategies, all three standards will be played successfully here in China."

Asia, as a whole, is contributing more to Nortel's global business, and China is the star of the Canadian IT giant's Asian business territory, Dunn said.

"North America still accounts for the bulk of our overall business. But we see our market share is dropping.

"Asia-Pacific markets, such as China, India and Australia, are developing very fast. Among them, China is developing fastest, in terms of market potential."

Nortel announced last week it will invest US$200 million in research and development in China over the next three years, as it aims to strengthen its position in the world's biggest wireless market.

The network equipment maker plans to build a large industrial park in Beijing.

"You cannot develop world-class products that are close to customers when you are not close to your customers," Dunn said.

Nortel, which has research and development facilities in Beijing and Guangzhou, capital of South China's Guangdong Province, is the latest multinational firm to increase spending in China, which is widely considered to have good, inexpensive engineering talent.

French telecoms giant Alcatel SA and Japan's NTT DoCoMo Inc announced in August they would increase their investments - US$145 million and US$5.3 million, respectively - in research and development in China.

The nation drew nearly US$37 billion in actual foreign investments in the year's first eight months, up more than 18 per cent year-on-year.

China, the world's biggest wireless market in terms of subscribers, with nearly 240 million mobile phone users at the end of July, has become a vital market for wireless technology companies, which have struggled in recent years with the sluggish global market.

(Business Weekly 09/23/2003 page1)