Huawei and Siemens kick off venture in Beijing

Telecommunications gear giants Siemens and Huawei Technologies officially launched a joint venture to develop third-generation mobile communication products on Thursday.

The companies announced plans for the joint venture in August. It will develop, manufacture and market wireless products based on Time Division Synchronous Code Division Multiple Access (TD-SCDMA), an emerging 3G standard.

Together Siemens and Huawei are investing more than $100m in the project. Siemens will hold 51 per cent of the company, which will be based in Beijing, and the Chinese telecommunications gear maker will own 49 per cent.

Siemens' mobile division has already transferred its global research and development, marketing and sales responsibilities for TD-SCDMA to Beijing. The German company is assigning more than 200 employees to the venture, while its Chinese counterpart will contribute around 100 workers.

The TD-SCDMA standard, which was developed by the China Academy of Telecommunications Technology in collaboration with Datang and Siemens, is designed to help operators move from a second-generation wireless network to a 3G one.

TD-SCDMA supports data transmission at speeds of up to 2 megabits per second and includes support for both circuit-switched traffic, such as voice or video, and packet-switched traffic from the Internet. The standard combines Time Division Multiple Access (TDMA) technology with an adaptive, Code Division Multiple Access (CDMA) component. Networks supporting the TD-SCDMA standard can be operated alone, or they can be used to supplement GSM (Global System For Mobile Communications) or UMTS (Universal Mobile Telecommunications Systems) networks to help them cope with heavy data traffic.

Several wireless operators in China are already testing the mobile standard, according to Siemens. The Chinese Ministry of Information Industry allocated a 155 megahertz spectrum to TD-SCDMA in October 2002, but so far licenses have not been granted to wireless network operators.

The joint venture will focus initially on the Chinese market, but a Siemens representative said the company hopes that wireless operators in other countries will also adopt the standard.

In 2003, Huawei also launched a joint venture with networking vendor 3Com. The companies started operating the business in China in November.

Marguerite Reardon writes for CNET News.com