March 19, 1997 in Social Responsibility News

SAMSUNG Electronics Moves into Chinese Telecom Market

Seoul, Korea, March 19, 1997: CDMA hardware made by Samsung Electronics will be supplied to Shanghai, China. In hopes to obtain position as the standardized technology of the telecommunication industry, producers of Code Division Multiple Access (CDMA) and the Global System for Mobile Communications (GSM) are currently under fierce competition Shanghai, where both technology coexist, is being considered as an ideal test-bed in determining which technology will eventually prevail.

After a tough bid with the industry leaders such as Motorola, and Lucent Technology, Samsung Electronics was appointed in conducting the establishment of the CDMA cellular phone network, and in providing the supply CDMA hardware to the city of Shanghai.

The turnkey contract calls for Samsung Electronics to provide China Shanghai Changcheng Mobile Communications Co., Ltd. with a switching station that has the capacity to handle 68,000 subscribers as well as 67 base stations and follow-up services. Installation is scheduled to begin in the first half of this year, and the system to be fully operational within the second half.

By winning this contract, Samsung finds significance in the fact that it has captured, and is supplying equipment to Shanghai, the largest Chinese market with the highest potential of growth, which is considered as the symbol of Chinese modernization efforts.

In introducing cellular CDMA systems in 1996, the authorities of the Chinese government opened tenders in four major cities Beijing, Shanghai, Guangzhou and Xian. Taking part in the bid were as mentioned before, major leaders of the industry such as Motorola. The bid for Shanghai were five companies Samsung Electronics, Motorola, Lucent Technology, Northern Telecom and QualComm. The results of the bid were Lucent Technology for Guangzhou, Motorola for Peking, Northern Telecomm for Xian, and Samsung for Shanghai.

It is quite clear that the Chinese are seeking for a new telecommunications standard to satisfy its market of 1.3 billion people. Therefore, Samsung Electronics` entry into the Chinese mobile telecommunications market is seen as an important milestone for Korean companies in the overseas markets.

The Chinese government has a long-term plan to make Shanghai an international center of trade and finance on a par with Hong Kong. It is investing much effort on building up its telecommunications infrastructure, which indicates that the information and telecommunications business of Shanghai will undergo miraculous growth.

The number of cellular phone subscribers alone is staggering. There were 380,000 users in 1996 and that figure is expected to increase by 600,000 this year.

Samsung Electronics has already established a joint venture company to market wireless local loop (pager) systems in Shanghai. It has already started in supplying pagers and services to 1 million subscribers. Now that SEC is supplying CDMA cellular systems, the company will seek to get into the supply of Personal Communications Service (PCS) hardware and Asynchronous Transfer Mode (ATM) switching systems.

Samsung Electronics Co., Ltd., headquarters based in Seoul, is a world leader in the electronics sector, with operations in more than 60 countries. The company develops, manufactures, and markets audio and video products, household electronics goods, computers & peripheral products, display products, telecommunication & information systems, software tools & semiconductors. Samsung Electronics employs over 70,000 people worldwide.

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