The world's largest telecommunications equipment vendor Ericsson yesterday made its first step towards tapping the Chinese 3G market.

The Scandinavian phone giant made a clear statement of intent by announcing plans for a research and development (R&D) centre in Nanjing, Jiangsu Province, and a partnership with Chinese company ZTE.

The centre will focus on developing solutions for the 3G time division synchronous code division multiple access (TD-SCDMA) standard, a system supported by China.

"We have been watching the development of TD-SCDMA for many years and said we would provide solutions and products, if the market demand becomes mature," said Tu Min, vice-president of Ericsson China.

"We think it is the time now," she added.

Ericsson did not provide financial details of the centre, but said it would initially be staffed with 50 engineers.

Tu said the centre is close to Ericsson's telecommunications production base in Nanjing and the two facilities will be able to share development resources.

Ericsson also formed a strategic alliance yesterday with the Chinese telecommunications equipment vendor ZTE.

According to the agreement, ZTE will provide its base station Node B hardware along with software products to Ericsson which will integrate them into its wireless network.

The two companies will also co-operate in TD-SCDMA trials in China.

Tu said the new R&D centre and the partnership with ZTE will enable Ericsson to support all three international 3G standards: wideband CDMA, CDMA2000, and TD-SCDMA.

Vincent Fu, a telecom analyst with US market research house Gartner, said the moves by Ericsson showed a change in their wait-and-see attitude on the TD-SCDMA standard.

It is now widely agreed that TD-SCDMA is almost certain to be deployed in China, the world's largest mobile communications market with 349 million subscribers.

China is widely expected to award 3G licenses later this year.

The homegrown TD-SCDMA standard has been tested in several rounds of trials organized by the Ministry of Information Industry and is believed to meet the requirements necessary for a commercial launch.

"It is a sensible decision and there is no need for Ericsson to put all their eggs into one basket," said Fu.

He added that with the increasing likelihood of TD-SCDMA deployment and the participation of main-stream vendors like Ericsson, more international equipment suppliers may try to enter the TD-SCDMA development race.

(China Daily May 20, 2005)