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China Gets Femto Fever

The femtocell action has officially kicked off in China as Huawei Technologies Co. Ltd. announced today that it has supplied the tiny home base stations to China Unicom Ltd. (NYSE: CHU) for an initial deployment in Beijing.

The news puts some detail on reports from last month that Unicom had launched a femto service called "3G Inn." However, other details about this deployment are still unclear -- in particular, whether the service is actually a trial or commercial offering, how much it costs, and who Unicom's other suppliers are.

But even with the uncertainties, the news is important for the young femtocell industry because the Chinese market, with its vast size, could potentially drive up volumes for the little base stations if they take off there. And higher femto device volumes would mean lower femto prices for operators not only in China but also globally. (See Femto Forecast Cut.)

"Vendors are putting a lot of effort into the Chinese market," says Aditya Kaul, senior analyst at ABI Research . "They expect the [Chinese] market to drive the femto market... There are a lot of trials going on."

Unicom, China's second-largest operator after China Mobile Communications Corp. , is rolling out an HSPA 3G network across the country and officially launched its 3G "Wo" service on October 1 -- which is the same day it also launched the iPhone in the country. The operator already has 530,000 3G customers since it began a friendly user trial in May. (See China 3G Update: App Stores & iPhones, China Unicom Plans Massive Capex Hike, and AsiaWatch: Unicom Preps iPhone Launch.)

Huawei's femtocells support 7.2Mbit/s HSPA. Unicom is using the access points in Beijing for now, and has plans for a nationwide service, according to Huawei.

It is thought that Huawei is one of three femtocell suppliers at Unicom. And Alcatel-Lucent (NYSE: ALU) is understood to be another of the operator's femto suppliers.

Huawei has been busy on the femto front in other markets too. The Chinese vendor is due to start interoperability testing of the 3rd Generation Partnership Project (3GPP) Iu-h standard with Ubiquisys Ltd. at T-Mobile International AG 's labs in Germany over the next six months. (See T-Mobile Tests Femto Interop and Huawei Lands More Femtocell Action.)

Huawei's3G femtocells are already commercially deployed in StarHub 's Home Zone service in Singapore. The vendor claims to have deployed 40 femtocell networks worldwide. (See StarHub Launches 3G Femto Service.)

— Michelle Donegan, European Editor, Unstrung

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