SAN DIEGO -- February 1, 2000 -- Qualcomm Incorporated (Nasdaq: QCOM), pioneer and world leader of Code Division Multiple Access (CDMA) digital wireless technology, and China United Telecommunications Corporation (China Unicom), China's second-largest state-owned telecommunications company, today announced that they have signed an agreement that provides the guidelines and framework for the licensing of Qualcomm's intellectual property for the manufacture and sale of CDMA wireless equipment by domestic Chinese manufacturers. Under the agreement, Qualcomm will grant to Chinese manufacturers royalty-bearing licenses under Qualcomm's intellectual property to make and sell subscriber units and/or infrastructure equipment for wireless applications. Chinese manufacturing companies who enter into such licenses with Qualcomm will give assurances to purchase their requirements of CDMA Application Specific Integrated Circuits (ASICs) from Qualcomm as long as Qualcomm's ASICs are competitive in price and function. The installation of CDMA equipment in China Unicom's wireless network is expected to begin promptly. China Unicom was designated by the Chinese government to negotiate this framework agreement with Qualcomm to establish licensing guidelines.
"This significant agreement allows for the rapid expansion of CDMA in China and supports China Unicom's plans for a nationwide deployment of CDMA," said Dr. Irwin Mark Jacobs, chairman and CEO of Qualcomm. "The participation of China Unicom as the Chinese government's selected representative during the negotiations was a key factor in the successful conclusion and demonstrates China Unicom's confidence in our products and technology. We look forward to strengthening our relationship with China Unicom and working with Chinese manufacturers to support the commercial launch of CDMA."
"This agreement enables China Unicom to move forward aggressively with plans to deploy a commercial CDMA network with an initial capacity of 10 million subscribers this year, and exponentially grow the network in the next few years," said Mr. Yang Xianzu, chairman and general manager of China Unicom. "Our agreement with Qualcomm will accelerate and simplify the CDMA licensing process for Chinese manufacturers, and Chinese consumers will be offered the advantages of CDMA, including improved call quality and increased network capacity. We are pleased to have participated in the negotiations and to have successfully concluded this agreement which will be of great benefit to all parties involved."
China's population totals approximately 1.2 billion with an average of 11.8 wireline and wireless phones per 100 people. Wireless penetration in China totals approximately three percent, but is expected to grow rapidly with CDMA, the fastest-growing wireless communications technology.
China United Telecommunications Corporation (China Unicom) is the second nationwide telecommunications carrier with its production covering basic services in telecommunications and value-added operations. Since its establishment on July 19,1994, China Unicom has achieved rapid growth in all services and enhanced the strength of the corporation, becoming a large-scale operator with its range of telecommunications services. China Unicom has committed itself to high quality and efficiency in the services provided. China Unicom has made progress in several areas, including mobile communication, data communication and long-distance communication. In 2000, China Unicom plans to implement a nationwide CDMA digital mobile communication network, in order to provide better mobile communication services to consumers using CDMA technology.
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. The Company's business areas include integrated CDMA chipsets and system software; technology licensing; Eudora® email software for Windows® and Macintosh® computing platforms; and satellite-based systems including OmniTRACS® and portions of the Globalstar™ system. Headquartered in San Diego, Calif., Qualcomm is included in theS&P500 Index and is a 1999 FORTUNE 500® company traded on the Nasdaq under the ticker symbol QCOM.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis, and those related to performance guarantees, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 26, 1999, and most recent Form 10-Q.
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Qualcomm, OmniTRACS and Eudora are registered trademarks of Qualcomm Incorporated. Globalstar is a trademark of Loral Qualcomm Satellite Services, Incorporated. Windows is a registered trademark of Microsoft Corp. Macintosh is a registered trademark of Apple Computer Inc. All other trademarks are the property of their respective owners.