Nortel Networks Ltd. (NYSE/Toronto: NT) has ramped up efforts to win a slice of the lucrative Chinese 3G market, teaming with local partner China Putian on the development and sale of TD-SCDMA and W-CDMA equipment.

The new business -- dubbed Putian-Nortel Networks Telecommunications Equipment Co. Ltd -- is expected to be headquartered in Wuhan, capital of Hubei Province. China Putian will control a majority 51 percent of the company, with Nortel owning the remaining 49 percent.

Specific financial details were not disclosed.

Developed by the Chinese Academy of Telecommunications Technology, Time Division Synchronous Code Division Multiple Access (TD-SCDMA) has been approved by the 3rd Generation Partnership Project (3GPP) and combines older Time-Division Multiple Access (TDMA) with Time-Division Duplexing (TDD) techniques of broadcasting over a single chunk of spectrum, rather than the normal two bands (see TD-SCDMA Forum Joins 3GPP).

The Chinese government has been eagerly touting the benefits of TD-SCDMA, and the technology is tipped to feature in the award of 3G licenses, due later this year. The established European standard, Wideband-Code Division Multiple Access (W-CDMA), is also expected to be deployed by at least one national carrier (see China Preps for TD-SCDMA).

Nortel’s move is the latest effort by Western network vendors to target the Chinese 3G market, a region dominated by local players. In November last year Alcatel (NYSE: ALA; Paris: CGEP:PA) announced a similar deal with Datang Telecom Technology Co. Ltd.; and Siemens AG (NYSE: SI; Frankfurt: SIE) has teamed with Huawei Technologies Co. Ltd. (see Alcatel Tangos With Datang and Siemens, Huawei Sign JV ).

In September 2003 Nortel also partnered with Datang on the opening of a TD-SCDMA test laboratory in Beijing. "It was a successful field trial but the collaboration has now ended," Alan Pritchard, Nortel's VP of marketing for GSM and UMTS technologies, tells Unstrung (see Nortel, Datang Open 3G Lab).

— Justin Springham, Senior Editor, Europe, Unstrung