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3G

Alcatel’s $350 Million TD-SCDMA Cooperation with Datang in China

Shanghai Bell-Alcatel’s reported $350 million cooperation with Datang supported China’s TD-SCDMA 3G research, production and network trials—not a confirmed equity purchase.

By TheFinanceBase Team 2 min read
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In November 2004, Shanghai Bell-Alcatel agreed to invest a reported $350 million in work with Datang to advance China’s TD-SCDMA 3G standard. The documented purpose was research, development and industrial production—not a confirmed purchase of equity in Datang.

What did Alcatel invest in Datang for?

The investment was tied to a strategic cooperation agreement between Datang and Shanghai Bell-Alcatel. A 2014 scholarly account reports that Shanghai Bell-Alcatel committed $350 million to promote TD-SCDMA research, development and industrial production. The available accounts describe investment in the standard’s development and commercialization; they do not establish that Alcatel bought a direct ownership stake in Datang. SinoSS scholarly account (2014)

What was TD-SCDMA?

TD-SCDMA stands for Time Division-Synchronous Code Division Multiple Access. It was a 3G mobile standard associated with Datang and intended for the Chinese market. On 11 April 2001, Datang and Germany’s Siemens jointly released the system, describing plans for its full development for China. U.S.-China Economic and Security Review Commission report

Why was TD-SCDMA important to China?

TD-SCDMA represented a domestic 3G standard that China could develop and deploy in its own market, rather than relying only on foreign-developed alternatives. Datang’s role in releasing the system and Alcatel’s support for its research, production and network trials illustrate how domestic technology development could involve international equipment-company cooperation. The documented material does not establish the standard’s eventual market share or commercial success.

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How did the Alcatel-Datang alliance proceed?

Date Development
11 April 2001 Datang and Siemens jointly released TD-SCDMA for development for the China market.
November 2004 Datang and Shanghai Bell-Alcatel signed a strategic cooperation agreement; Shanghai Bell-Alcatel’s reported $350 million investment supported research, development and industrial production.
2006 Alcatel reported deploying TD-SCDMA trial networks in China.
Early 2007 Alcatel’s later annual-report account says the first phase of a China Mobile TD-SCDMA trial began.
2008 Alcatel reported winning the phase-II China Mobile TD-SCDMA trial.

Alcatel-Lucent’s 2008 annual report described an alliance with Datang Mobile to foster development of the standard and reported the 2006 trial deployments. The cooperation therefore extended beyond the 2004 agreement into practical network trials with China Mobile. Alcatel-Lucent 2008 annual report

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Was the $350 million an equity investment in Datang?

That is not established by the accounts cited here. The reported amount is described as Shanghai Bell-Alcatel’s investment in TD-SCDMA research, development and industrial production under the strategic cooperation agreement. Calling it a purchase of Datang shares would go beyond the documented evidence.

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