Ericsson partners with ZTE for TD-SCDMA

Ericsson became the latest carrier to link up with a Chinese vendor, today announcing a strategic partnership with Chinese vendor ZTE for TD-SCDMA technology.

TD-SCDMA is a technology being promoted by the Chinese government and developed by Chinese and international vendors. Though the network architecture hasn't caught on in any other country, the sheer size of the Chinese market has caused many vendors to commit to its development. Ericsson officials said they have developed a TD-SCDMA technology, but don't have a product yet. ZTE, on the other hand, unveiled its TD-SCDMA product portfolio last week.

An Ericsson spokesman said China is expected to award 3G licenses for W-CMDA, CDMA 2000 and TD-SCDMA. While Ericsson's W-CDMA portfolio is one of the strongest in the world, its CDMA 2000 efforts suffered a big setback earlier this month as Ericsson shut down its U.S. CDMA operations. While the vendor said it would continue to support the technology line, it said it would refocus its efforts in other markets, particularly Asia, where its largest customer, China Unicom, is located. With its new partnership with ZTE, it now has a foothold in TD-SCDMA and can compete across the entire portfolio of Chinese technologies.

"The strategic alliance between Ericsson and ZTE is different from other partnerships in the market in that Ericsson is collaborating on an OEM basis," the spokesman said. "Specifically we will integrate ZTE's TD-SCDMA Node B into our radio access network, including software and hardware."

Many carriers have decided to get a leg up by partnering with China's vendors. Nortel Networks is partnering with Putian, Siemens with Huawei and Alcatel with Datang. While all of their relationships are different, ranging from marketing deals to technology collaborations, to OEM agreements like Ericsson's, all of the deals demonstrate the difficulties vendors are anticipating penetrating the tightly controlled Chinese market where the government is expected to favor local vendors. Though TD-SCDMA is a 3GPP-approved 3G technology, most of the initial work on the technology was performed by Chinese vendors and the Chinese government.

Also, Ericsson appears to be making a concerted effort to focus on China. While it is shutting down its U.S. San Diego operations, the vendor also announced today that it will be opening an R&D center in Nanjing, China, to focus on TD-CDMA technology. Ericsson said it is expected to have a research staff of 50.