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Siemens Plays Ball in China

Wireless vendors, it seems, are going to do almost anything to curry favor with the Chinese authorities in the run-up to the award of that country's 3G licenses. Witness the probably rather smart move today by German giant Siemens AG (NYSE: SI; Frankfurt: SIE), which is cutting deep into its marketing budget to sponsor the national Chinese soccer teams -- all seven of them (see Siemens Sponsors Soccer).

Just how much of that budget Siemens is shelling out is a secret, but a spokeswoman tells us it is certainly worth many millions of dollars for the two-year duration, and that the company has an option to extend for a further deuce.

It could be money well spent if this financial gesture is taken into account when the conditions of China's 3G licenses are revealed, which could be anytime between now and 2005, depending on whom you believe (see What's Up With Chinese 3G?).

Siemens is rather hoping that it will benefit from some specific license conditions that would force China's mobile operators to deploy equipment based on China's home-grown flavor of 3G, TD-SCDMA. Siemens has been developing this technology in league with Chinese vendor Datang Mobile Communications Equipment Co. Ltd. for some years now.

Four 3G licenses are expected to be awarded, and if any of these state a conditional use of the TD-SCDMA tech, then it's (possibly) payback time for Siemens. But only possibly.

The key issue is that no one knows just how much of this technology the operators will be obliged to use, though it seems certain that it will be deployed at some point, as spectrum has been allocated specifically for use by TD-SCDMA equipment (see Siemens Praises Chinese 3G).

And in the same way that Siemens has its hopes up, so all the other major wireless infrastructure players -– the likes of Nokia Corp. (NYSE: NOK), LM Ericsson (Nasdaq: ERICY), NEC Corp. (Nasdaq: NIPNY), and Nortel Networks Corp. (NYSE/Toronto: NT) with their WCDMA kit; and Motorola Inc. (NYSE: MOT), Ericsson, Nortel, Lucent Technologies Inc. (NYSE: LU), and Samsung Corp. with their CDMA2000 boxes -- are on tenterhooks waiting for the Chinese authorities to lay their (line) cards on the table. Billions of dollars of capex are at stake.

So by sucking up to its Beijing buddies, Siemens is hoping to bolster its case for business and thrust its brand into every Chinese home to help sell its handsets. Soccer is now the most popular sport in China, so the deal, which also includes television rights, is quite a coup.

And this partnership kicks off [ed. note: a cheap shot…] tomorrow, when Team China faces world soccer champions Brazil in a friendly match in Guangzhou that Siemens will be hoping does not end in a 0-7 home defeat, no doubt. The last team these two played, more than 700 million Chinese tuned in to watch.

Surely other vendors will follow suit for branding opportunities. Maybe Nokia will sponsor the Chinese National Motorbike Display Team's "six-bike fan" (see Nokia's Fast Mover). Or maybe not...

— Ray Le Maistre, European Editor, Unstrung
simmsf 12/5/2012 | 12:38:28 AM
re: Siemens Plays Ball in China Our domestic (and some foreign)press is quick to say that "Bush's policy in Iraq is all about oil"
Is it possible that European (German) policy toward Iraq, North Korea, and China is "all about high-tech telecommunications"? and oil?
joset01 12/5/2012 | 12:38:26 AM
re: Siemens Plays Ball in China I should preface this by saying that I'm by no means an expert on this. But I think you have to think that there is a lot of self-interest going on here (on all sides...).

For instance, Alcatel has a 76 million dollar contract to rebuild the telecoms infrastructure in Iraq (or at least they did several months ago).

Not so sure about Siemens...I'll look into it.

DJ Unstrung
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