China Cellphone Law Could Cost Billions
Reuters
Journalist: 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.
IMPACT IN SHORTER TERM
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.
TOUGH STANDARDS UNUSUAL IN CHINA
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.
China's
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.