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China Cellphone Law Could Cost Billions
Jonah Greenberg
May 24, 2002

China may impose the world's toughest mobile phone radiation standards due to fears of health risks, telecoms officials said on Friday, threatening global cellphone makers with an expensive bill in their biggest market.

The country is mulling strict standards that would cap handset radiation emissions at half the levels allowed overseas, which the officials said could cost the industry billions of dollars to adjust equipment.

"If they set the standard that high, then handset makers would have to make changes to their operations ranging from R&D all the way to production," said Chen Yujian, director of the China Mobile Communications Association.

Yujian said it could cost cellphone makers hundreds of millions of dollars. Industry officials said the move could hit local network operators harder, costing them $2.4 billion.

"It's not just a problem for us, it's a problem for the whole industry, including domestic vendors as well," said David Hartley, Nokia's top
mobile phone executive in China.

Late last year, a government committee in charge of setting China's first cellphone safety standard aired ideas that were more conservative than most had expected, Chen said this week.

Explosive growth in
mobile phones around the world has increased public debate over possible risks linked to the devices, although most authoritative studies have not concluded that regular users risk brain damage.

But last year an official at a World Health Organization (WHO) agency said a link between
mobile phone usage and cancer could not be dismissed without further research.

China's proposed rules would cap the legal amount of radiation that can be passed from a handset to its user, called the Specific Absorption Rate (SAR), to one watt per kg, compared to two watts elsewhere, Hartley and Chen said.

The government committee in charge of the standard could not be immediately reached for comment.


Hartley said Nokia's handsets would mostly conform to the proposed standard. But due to a margin of error for some models, the Finnish cellular giant would need to invest anew in product design and testing if the rules were passed.

"To an extent, you would have to have a different research and development effort abroad and in China, and that's not particularly cost-effective," he said, adding that his company had held discussions with the standard setters.

"If the new regulations came through, it would have an impact on our business in the shorter term rather than the longer term," said Hartley.

But he declined to say what the cost would be to the company -- maker of one in three of the world's cellphones -- over any period of time.

A spokesman in Beijing for Motorola Inc, which sold the biggest portion of the nearly 50 million handsets bought in China last year, said his firm supported the less stringent standard upheld in Europe and the United States.

That standard, set by the Germany-based International Commission on Non-Ionizing Radiation Protection, has been endorsed by the WHO, according to Burson Marsteller, a public relations firm hired by Nokia and others.

Other major suppliers in China are Ericsson, Samsung Electronics Co and Siemens AG.

Local firms include TCL Mobile, 30 percent owned by TCL International Holding Ltd and Eastern Communications.

China's committee, with representatives from six government agencies, has declined to make public the research it says points to the need for the higher safety standards -- a detail that has flustered Hartley and other groups involved.

"We think it's strange because in China many standards don't meet the international level, such as environmental standards. We don't know why they want to continue on in this way," said Chen.

mobile network operators, which handle a total of 167 million subscribers, could also take a hit if the proposed rules are enacted, industry officials estimate.

China Mobile Communications Corp and China Unicom Group would face estimated combined costs of $2.4 billion to deploy more cellular base stations to compensate for the lower energy levels, Burson Marsteller said in a written statement sent to Reuters.

Along with their respective Hong Kong-listed units China Mobile (HK) Ltd and China Unicom Ltd, the carriers are accustomed to the political nature of standards in China and are waiting for Beijing to set a technology standard for third generation, or 3G, networks.

The 26-member standards committee responsible for radiation limits, called the China EME (electromagnetic energy) Standard Working Group, was formed three years ago, according to Burson Marsteller.

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