Wireless web boom predicted for China market

December 4, 2000
Web posted at: 6:59 PM HKT (1059 GMT)

By Nic Hopkins
CNN Interactive Writer

Hong Kong (CNN) -- Hundreds of millions of people in China will get their first taste of the Internet not with the click of a mouse but via the small screen of a Web-enabled mobile phone, wireless technology pioneer Dr Irwin Jacobs predicts.

Following in the footsteps of Japan, where customers of mobile giant NTT DoCoMo now download data through their handsets, China is expected to offer Internet access to far more people through mobile phones than fixed-wire connections.

Speaking at the International Telecommunications Union's Asia 2000 conference in Hong Kong, Jacobs, chairman and chief executive of wireless technology firm Qualcomm Inc, told delegates that China had begun to embrace the next generation of mobile technology capable of turning devices such as mobile phones and personal digital assistants into gateways to the World Wide Web.

Jacobs' announcement came as Qualcomm confirmed Monday that it had signed a memorandum of understanding with China's Ministry of Information Industry to deploy its code division multiple access (CDMA) mobile phone technology in China.

I-mode success

"Phones will not take the place of wires, but in many instances there will be more people accessing the Web through their phones using technology like CDMA than through PCs," Jacobs told a conference press briefing. "Look at the example of Japan and the success of i-mode."

I-mode was devised by NTT DoCoMo who partnered with Japanese toy maker Bandai to develop a system allowing phone users to download pictures of baseball players, pop stars and animated characters that move when the phone rings.

Users can trade characters back and forth by messaging them to each other's phones.

More than 14.7 million Japanese now use i-mode, and the number is growing by an average of 50,000 a day.

China has a relatively low rate of mobile phone use on a per capita basis but by virtue of a population exceeding 1.25 billion it is seen as the world's number two mobile market, second only to the United States with more than 70 million users.

Instant access

Qualcomm's CDMA technology offers phone users the ability to access the Internet through their handsets.

With narrow band CDMA access would be relatively slow, but the system can be upgraded allowing users in the near future to surf the Web almost instantaneously.

Jacobs says he expects mobile phone providers to experiment with different billing services -- some customers will be offered "all you can eat" packages while others will offer the option of buying a set number of hours access each month.

At the same briefing Scott Erickson, the vice president of business development for the Lucent Technologies wireless networks group told delegates experience had shown that NTT DoCoMo had significantly under-estimated the potential of i-mode when it launched onto the Japanese market.

"In many cases", he said, "there were people surfing the Internet for the first time through a wireless medium."

Preferred system

The agreement with China's information ministry moves Qualcomm a step closer to locking in CDMA as the preferred system in China for mobile Internet access.

It also confirms a January agreement signed between Qualcomm and the Government-run mobile phone provider China Unicom to use CDMA.

"The agreement goes a long way to proving that the support [for CDMA] does exist. It makes us more optimistic," said Jacobs.

Earlier this year China Unicom, China's second-biggest mobile company, said it planned to build a mobile network using narrow-band CDMA technology, although the size and timing of the deployment were not specified.

China Unicom has been the cause of upheaval on the Hong Kong stock exchange's barometer Hang Seng index, dragging the market down in recent months on fears the Chinese Government might revise the tariff system on mobile phone charges.

The downturn came on fears that Beijing might impose a switch to so-called "calling party pays" (CPP) billing systems for all calls between mobile phones as early as the start of 2001, draining confidence from listed Hong Kong telephone stocks.

However, the Ministry of Information Industry said late last week it did not expect to revise the billing system either in either 2001 or 2002 -- an announcement that sent telecom shares bouncing swiftly higher.

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