Japanese conglomerate NEC formed a joint venture with the Chinese telecoms equipment provider Fiberhome Technologies yesterday, trying to add some weight to its bid to win contracts for third generation (3G) mobile equipment.

The two companies launched the joint venture Wuhan Fiberhome Mobile Co Ltd in Beijing, in which Fiberhome Technologies takes 65 per cent of the shares.

The joint venture, with a registered capital of US$15 million, is based in Wuhan of Central China's Hubei Province, where Fiberhome Technologies is headquartered and NEC's handset manufacturing facility is located.

"We have been trying to merge into the Chinese market and industry and the partnership with Fiberhome will make us get closer to the domestic market," said Ben Nakamura, senior vice-president and member of the board of NEC.

The joint venture will focus on the development, production and sales of equipment for wideband code division multiple access (WCDMA), a major international 3G standard. The current focus is on wireless access network, indoor coverage solutions, and value-added services.

Lu Lei, president of NEC Telecom China, said Fiberhome Technologies' strength lies in the development, marketing and provision of services to the domestic market and is a major attraction for his firm.

The Japanese giant, which claims to be the biggest global player in WCDMA equipment, will gain some weight in winning contracts from Chinese operators.

NEC said it will also apply to join the TD-SCDMA (time division synchronous CDMA) Alliance, a group promoting the Chinese-supported 3G standard.

The government has not yet decided when to release 3G licences, but international giants such as Ericsson and Nokia, and big domestic names, are all paying a lot of attention to the huge potential of the 3G equipment market.

For the Chinese telecoms equipment firm Fiberhome Technologies, the partnership with NEC will increase its technological strength.

"This is another major step in our strategic transformation," said Tong Guohua, president of Wuhan Research Institute of Post and Telecommunications, parent of Fiberhome Technologies.

The firm, which is a leader in optical telecommunications equipment in China, has been expanding into the mobile communications market over the past three years.

(China Daily June 10, 2005)