Nokia moves into China 3G with Putian

Nokia and China Putian became the latest West-meets-East pairing to tackle 3G technology as the two today announced a joint venture focusing on the development of both Chinese and European 3G standards.

The two companies will invest 900 million Chinese RMB ($111.4 million) into the venture, which will be based in Wuhan, China, and be 51% owned by Putian and 49% owned by Nokia. The venture will focus on the research and development, manufacturing and marketing of time division-synchronous CDMA (TD-SCDMA), a standard developed by Chinese vendors with government support, and traditional wideband CDMA technologies. Much like many of the other Asian-Western telecom ventures, the partnership is expected to focus its efforts in China and other Asian countries. Reflecting that focus, Nokia and China Putian have agreed to market the new equipment lines under Putian’s Potevio brand, the first products of which will be available in 2006.

While the initiative is big, Putian certainly isn’t laying all its loyalty at Nokia’s feet. Putian struck almost the exact same deal with Nortel Networks in January, creating a 51%-49% Wuhan-based venture with the Canadian vendor focusing on the same technologies. So far nothing has emerged from the Nortel-Putian partnership, but the companies were still finalizing the details in the spring.

Nortel, however, has had success with its Asian partnerships. Its joint venture with LG Electronics in South Korea has given Nortel a major piece in the UMTS networks of Korea’s two largest carriers (see Nortel wins piece of SK Deal and Nortel/LG venture scores Korean win). The two UMTS contracts with SK Telecom and KTF propelled Nortel from non-entity to player status in the Korea’s radio access infrastructure market. Nokia could be hoping for the same results in China with its Putian deal.

While Nokia has won several GSM network deals with carriers in China, its 3G future before today’s partnership announcement was much cloudier largely due to its lack of a TD-SCDMA plan. TD-SCDMA, as its name implies, is a time division duplexing technology as opposed to the frequency division duplexing used in WCDMA technologies--instead of dividing the uplink and downlink over separate frequencies, all up and down traffic traverses the same spectrum. The Chinese government has not only given its stamp of approval for the homegrown technology, it has also allotted specific spectrum for TD-SCDMA service in what amounts to the world’s largest market. Nokia, however, is not a member of the TD-SDMA Forum and until today had no plans for TD-SCDMA product line.

“The widened cooperation between China Putian and Nokia will contribute greatly to the 3G industry development in China,” executive vice president for Nokia Networks Simon Beresford-Wylie said in a statement. “It shows Nokia’s commitment to TD-SCDMA technology.”