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The Chinese operators' 3G roll-out plans continue to shape the industry this quarter, and so far it appears that their favors will be spread more internationally than some vendors had feared. Although homegrown Chinese vendors have won significant portions of recent 2G expansion deals, as well as China Mobile's initial TD-SCDMA build-out, the western giants are also getting a look-in, and the first major W-CDMA contract from China Unicom is reported to have been split across three continents - between ¬Huawe¬i, Motorola and Ericsson.

Although Ericsson claimed the deals had not been signed and sealed, these three suppliers were reported by The South China Morning Post to have been the big beneficiaries of phase one of Unicom's build-out, which will cover 55 cities in 30 provinces, out of a total project that will cover 282 cities at a capex cost of about $11bn this year.

Huawei is understood to have won 30.6% of the tender and to be working closely with Motorola, which virtually pulled out of W-CDMA a year back, but still has a venture with Huawei, outsourcing manufacturing to the Chinese firm and providing core network gear and integration. Ericsson has reportedly gained a 25.6% share, working with its local partners New Postcom and FiberHome. Some preference for local vendors was seen in ZTE taking 21.5%, despite being a weaker W-CDMA player than Huawei or Ericsson. Nokia Siemens gained 11.1% and Alcatel-Lucent just 10%.

Meanwhile, China Mobile is pushing ahead with its TD-SCDMA roll-out and hopes to deploy LTE at an early stage, following joint trials with Vodafone and Verizon Wireless. Vodafone said this week, in an interview given by CEO Vittoria Colao to the London Financial Times, that it was seeking closer cooperation with these two operators to reduce its network and handset costs through collective purchasing. Vodafone owns 45% of Verizon Wireless and 3.3% of China Mobile. Colao indicated such collaboration would go well beyond the current LTE trials and extend to nearer term networks. He said: ""If these three companies could work more closely together in the management of customers, procurement and service creation, we could be unbeatable, quite frankly."

Meanwhile, the Chinese handset market offers a welcome opportunity for the major vendors and so far, Nokia and Motorola remain firmly in pole position as 3G starts to roll out. According to research from iSuppli, the Chinese cellphone market should grow by 7.7% this year, reaching 239.1m units, bucking the global trend of about minus 10%. Operators should sign over 90m new subscribers this year. 2008 sales surpassed 180m units, and the grey market was less of a problem, falling from 50m units in 2007 to an estimated 40m units. Some grey market suppliers became authorized suppliers, but outside vendors remained dominant, commanding 56% of the total, and led by Nokia. The leading Chinese brand was Tianyu. In the nascent smartphone segment, Nokia has a huge 69% share, followed by Motorola on 20%, and some showing for HTC and Samsung.

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