In China, Market Gets Crowded For Low-Power Wireless Phones

The Wall Street Journal

When mobile-phone service took off in China a few years ago, 20 domestic companies jumped into the business of making handsets. Now, as demand grows for a lower-cost wireless service, a crowd is forming to make phones for it.

Best known as a personal access-system but sometimes as personal handyphone, the service is offered by China's fixed-line providers, China Telecom and China Netcom. PAS service costs about 1.5 U.S. cents a minute compared with five cents or more for cellular. The handsets cost only about $50 to $100, compared with the $200 average price of a cellphone handset.

The service is built around low-powered wireless phones that link to base stations in a user's home, which are connected to wireline networks. The range of the phones is just a few miles, but that is adequate for many people. China is the first country where PAS has gained mass-market appeal, but it is also taking hold in other countries such as Vietnam and India.

UTStarcom and Lucent Technologies of the U.S. and ZTE Corp. of Shenzhen, China, are the chief makers of PAS equipment. UTStarcom has 70% of the PAS handset business in China, with ZTE and a few other Chinese firms, such as China Putian, taking the rest. But at a trade show in Beijing last week, at least 10 more companies unveiled PAS phones. Shenzhen-based Huawei Technologies is trying the consumer side of the equipment business for the first time, with three models.