March 21, 2000
By Meredith Thompson, Bridge News

Beijing-Mar 20--China, as one of the world's largest mobile telecom
markets, is likely to serve as a fertile ground for the take-off of
wireless Internet applications, analysts and industry players said. They
said China will likely leapfrog other countries in its adaptation of the
new technology, which utilizes faster, broadband services and allows users
to access the Internet through mobile phones or to receive
radio-transmitted communications with palm-held personal digital assistants
(PDAs).
* * *
Although wireline communications-up until this point the traditional method
of Internet connection around the world-have only recently begun to take
off in China, many now believe that China may be faster on the uptake with
wireless hook-ups as a more flexible and reliable access method.

Silicon Valley-based GWcom, for one, is counting on just that. The firm is
aiming to provide an end-to-end solution for wireless Internet access for
PDAs, more commonly known as palm pilots, and has already invested some US
$30 million in building the necessary infrastructure for the new technology.

Furthermore, GWcom, founded in 1994, has developed its own model PDA, the
Voyager, a wireless portal and wireless application that allows users to
engage in everything from e-commerce to on-line stock trading.

Although Shanghai and Shenzhen are so far the only mainland cities equipped
to service wireless users, GWcom-with financial backing from Intel,
International Data Group (IDG) and Hong Kong's New World
Infrastructure-sees a huge future in a market already hot on mobile
communications.

"In terms of the high-tech market, China has about one-one thousandth of
the US market-except in the wireless sector. There are already 45 million
cell phones in China, and its not unthinkable that (in a few years) total
mobile subscribers could exceed the population of the US," company
president Victor Wang said. "China will likely become the world's largest
wireless market," he predicted.

According to Wang, wireless technology's largest advantages may be its
ability to support both data and voice transmissions, while allowing users
to access the internet either through mobile phones or a data network that
supports PDAs' connection to the internet.

"Wireless is qualitatively different from wireline-it's like comparing a
freeway to an unpaved road," Wang said.
"We're building a network based on a clear radio spectrum with no
congestion. If you tried to upgrade wireline networks to put data together
with voice, the road would become too congested because their bandwidth is
not expandable," he explained.

While wireline transmissions are confined to a set bandwidth that becomes
congested when too many users log on at the same time, wireless
communications are transmitted and received by radio signals sent out from
a regional base station with almost no limitations on how many data can be
handled simultaneously.

Because of this added capacity and the reduced risk of transmission
interruptions, wireless transmissions also tend to be more reliable and
make the technology the perfect companion to e-commerce, Wang said.

He added that he hoped to see GWcom's wireless infrastructure, called the
PLANET system, employed in China's 10 largest cities by the end of this
year and in most of the country's 32 provincial capitals by 2001.

Although domestic Internet users surged more than 400% last year to hit 8.9
million, China was slower than most countries to hop on the internet
bandwagon, while an uncertain regulatory environment is believed by some to
be hampering the sector's growth.

Growth was snagged in the early stages by poor infrastructure-including
unreliable lines and connections regularly dropped-high user fees and a
lack of access to both PCs and modems amongst most Chinese. But Ted Dean, a
partner at BDA China Telecoms in Beijing, concurred with Wang's prediction
of a mainland wireless boom, pointing to China's current ranking as the
third largest mobile phone market in the world.

"We're still in the very early days, but if we look at how quickly things
have moved in Japan, it would not be unrealistic to see something similar
happen here," he said. He added that the sector would be given a boost by
Beijing's apparent enthusiasm for the new technology, highlighted by the
Chinese government recent decision to allocate a special radio frequency
for GWcom's wireless project. "That's not easy to get because the
government only offers it if the technology looks useful and there are
prospects for widespread adoption," according to Charles Peza, head of
Asian telecoms research at Lehman Brothers. Peza said that he saw no reason
for the government not to throw the full weight of its support behind
wireless development as government-owned operators from picking up
technology developed by firms like GWcom and using it in their own
operations.

"Economically it provides more value for the
same package, reasonably priced and subscribers
get lots of value-added services like information
and on-line trading," Peza said. End
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