Technology Base of Mobile Cellular Operators in Germany and China

A Comparative Study from the Perspective of the Resource-Based View

Mingtao Shi

H Contents Acknowledgement VIII List of figures X List of tables XI List of abbreviations XII List of appendices XVI 1 Introduction 1 1.1 Theoretical Background: Technological Resources of the Firm 1 1.2 Contextual Background: Comparison of Mobile Cellular Operators 2 1.3 Methodological Background: Research Structure and Conduct 4

2 Firm Technology Base and Resource-Based View 10 2.1 Resource-Based View: An Overview 10 2.1.1 Basic Assumptions 11 2.1.2 Resources and Competencies: Terminology 13 2.1.3 Central Theoretical Concepts 17 2.1.4 Review of Some Related Empirical Studies 26 2.2 The Role of Technology in Industries andFirms 31 2.2.1 Technological Evolution in Industry 32 2.2.2 Technological Resources and Competencies in the Firm 37 2.3 Summary: Technology Base of the Firm 42

3 History of Cellular Telecommunications: Technology and Industry 44 3.1 Emergence of Wireless Telecommunications Technology 44 3.1.1 Technological Background 44 3.1.2 Wireless Telegraphy and Wireless Speech Transmission 46 3.2 Cellular Telecommunications Technology: Emergence and Evolution 50 3.2.1 The Rise of Private Mobile Radio (1920s-1940s) 50 3.2.2 Commercialisation of Mobile Radio (1940s-1970s) 53 3.2.3 The Analogue Age: lst Generation (1980s-1990s) 56 3.2.4 The Digital Age: 2nd Generation (1990s-present) 64 3.2.5 The Data Age: 2.5, 3r Generation and Beyond (present and future) 71 3.3 Cellular Telecommunications Industry: Core Players 77 3.3.1 Cellular Industry Structure 77 3.3.2 Network and Service Provision 80 3.3.3 Infrastructure and Terminal Supply 82 3.3.4 Standardisation and Regulation 83 3.4 Summary: Evolution of the Mobile Cellular Technology and Technology Base of Mobile Cellular Operators 91

Cellular Operators in Germany: The Case of Deutsche Telekom 94 4.1 Deutsche Bundespost: Possessing the Wireless Monopoly (Before 1989) ....94 4.1.1 Deutsche Bundespost: The Historical Origin 94 4.1.2 Deutsche Bundespost: The Organisational Inertia 96 4.1.3 Deutsche Bundespost: R&D and the Role of Infrastructure Vendors 100 4.1.4 Deutsche Bundespost: Mobile Network Operation (A- and B-Netz) 105 4.2 DeTeMobil: Encountering the Cellular Competition (1989-2000) 108 4.2.1 The Postal Reform I: The Beginning of Structural Change 108 4.2.2 GSM Licensing, the Postal Reform II and III 112 4.2.3 DeTeMobil: R&D and Cellular Network Operation (C- and Dl-Netz) 116 4.2.4 DeTeMobil: Focusing on Market and Customers 120 4.2.5 DeTeMobil: Organisational Streamlining 130 4.3 T-Mobile: Seeking Multimedia Growth (Since 2000) 133 4.3.1 UMTS Licensing: The 100-Billion-MarkBaby 133 4.3.2 T-Mobile: R&D and Infrastructure Expansion (GPRS and UMTS) 135 4.3.3 T-Mobile: Intensifying Focus on Market and Customers 139 4.3.4 T-Mobile: Evolving Organisation forNew Challenges 145 4.4 Summary 149

Cellular Operators in China: The Case of China Mobile and Unicom 155 5.1 Ministry of Posts and Telecommunications (MPT): State Monopoly and Technological Dependence of Cellular Manufacturing Industry (Before 1994) 155 5.1.1 Historical Root of the Telecommunications Sector 155 5.1.2 MPT: Organisational and Technological Development 158 5.1.3 MPT: Integrated R&D System and the Manufacturing Industry 167 5.1.4 MPT: The Launch of Paging and Cellular Network (TACS) 172 5.2 China Telecom versus China Unicom: The Formation of Cellular Duopoly and Technological Assimilation in Cellular Manufacturing Industry (1994-1999) 178 5.2.1 The Formation of China Unicom and Ministry of Information Industry 179 5.2.2 Manufacturing Industry: The Rise of System Vendors 183 5.2.3 China Telecom: Organisation, R&D and Cellular Networks (GSM) 190 5.2.4 China Unicom: Organisation, R&D and Cellular Networks (GSM) 198 5.2.5 China Telecom versus China Unicom in the Cellular Customer Market 203 5.3 China Mobile versus China Unicom: Intensified Rivalry and the Beginning of Technological Independence of Cellular Manufacturing Industry (Since 1999) 209 5.3.1 Splitting of China Telecom and China's Accession to WTO 209 5.3.2 China's 3G strategy: TD-SCDMA versus WCDMA and CDMA2000 215 5.3.3 China Mobile: Organisation, R&D and Infrastructure (GSM and GPRS) 227 5.3.4 China Unicom: Adding the New Infrastructure (CDMA and CDMA IX).... 238 5.3.5 China Telecom and China Netcom: Leveraging with Xiaolingtong (XLT).. 245 5.3.6 Intensified Competition in the Cellular Customer Market 248 5.4 Summary 263

6 Conclusion 276 6.1 Technology Base of Cellular Operators: Germany compared with China ...276 6.2 Technology on Industry Level 284 6.3 Technology on Firm Level 288 6.4 Study Limitation and Future Research 291

Appendices 293 References 309 References in English 309 References in German 324 References in Chinese 335

Index 353