NEC Telecom, one of the only really active Japanese handset makers in China, regards China as its most important overseas market amid personnel changes and the retreat of other Japanese firms.

So says Ken Lu, the new president of NEC Telecom China.

Lu, who was the firm's executive vice-president, took over his new position on April 1 from Brian Lu, who now is vice-president with Apple Computer in charge of sales in Asia.

"Global expansion is a focus for NEC Telecom in the world and China is a priority in that expansion," said Lu yesterday.

He said the biggest challenges were to create an environment which would develop the careers of around 1,000 employees in China, and tap into more opportunities in the world's largest telecommunications market in terms of users.

NEC Telecom is one of the only Japanese telecom equipment and mobile phone manufacturers still active in China. Sharp, Mitsubishi, Toshiba and Kyocera have either left or greatly reduced their presence.

Lu said there will be no more personnel changes. Before Brian Lu left, Wang Shanqi, former vice-president and marketing director, had already left for NEC Telecom's competitor Sony Ericsson.

In accordance with NEC Telecom's global restructuring, NEC Telecom China has also increased its operational units from two to four. It now has carrier networks, mobile phone business, enterprise business and government business.

While continuing to develop products on 2.5-generation products including both telecoms equipment and mobile phones, NEC Telecom will also prepare for the launch of third generation (3G) mobile systems in China. The exact date for the launch is still unknown.

The Japanese business said last month that it would pour another US$225 million into its handset production base in Wuhan of Central China's Hubei Province, making the total amount US$248 million.

Lu said it was an important step in the preparation for the 3G launch, because the increase of capital would show the firm's commitment to the Chinese market and give it enough money to carry out the necessary technical preparations.

NEC Telecom, which claims to be the biggest firm in the equipment market of WCDMA one of the three major 3G standards will deliver equipment for HSDPA, a high-speed data transmission technology on the WCDMA network, to international giant Hutchinson Whampoa in Hong Kong.

Wang Jianzhou, president of the biggest Chinese mobile carrier China Mobile, said in February that if his company got a licence from the government to start 3G, it would start with a higher level of 3G, referring to HSDPA.

Lu said his company came fourth in China's trials of WCDMA equipment, but he hoped China Mobile's intentions would help NEC to get a bigger share of China's 3G market.

NEC Telecom will release 15 models of phones this year for the mid- and high-end market costing more than 1,500 yuan (US$186), down from 30 models in 2004.

The Japanese firm sold 2 million phones last year (about the same number sold in 2004) compared with a total of 93 million units sold in China in 2006. The company also saw 12 per cent year-on-year growth.

One reason for the departure or reduced presence of Japanese firms is that Japan adopted its own standard for second-generation mobile communications, but China followed the global version of GSM, so Japanese firms were left in a difficult situation with no experience of the GSM business.

The other reason is that Japanese companies have a centralized management system, so managers in China usually need to consult headquarters for instructions on marketing or product development.

This means they are not able to respond to market and competitor changes very quickly.

(China Daily 04/13/2006 page10)

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