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China weighs third-generation phone
options
BEIJING -
Fixed-line telephone network operator China
Telecom is urging the government to make up its
mind on the future of TD-SCDMA (time
division-synchronous code division multiple
access), a home-grown standard for 3G (third
generation) mobile communications.
At a 3G
symposium on Friday, Ye Lisheng, vice dean of the
Beijing Research Institute of China Telecom Corp,
said the authorities cannot afford to waste time
distributing operating licenses for the new
technology. "It's time [for the government] to
make up its mind on 3G policies. If we keep
waiting, it may be harmful for the development of
3G in China."
He also expressed
disappointment that TD-SCDMA has yet to win full
favor of foreign companies despite years of effort
by Datang, the major developer of the standard.
Ye's remarks represent the most serious concern
expressed so far by a domestic telephone operator
over the TD-SCDMA standard. The Chinese government
has been cautious in its approach to policies
regarding 3G mobile communications, largely
because of the slow development of 3G telephony in
the global market and the immaturity of TD-SCDMA.
TD-SCDMA competes with European-backed 3G
standard WCDMA (wideband CDMA) and US-backed CDMA
2000 and is the only one of the three systems yet
to be deployed commercially. Despite some hiccups
in the early stages of its development, 3G
technology is now gaining increasing momentum in
the global market. CDMA 2000 and WCDMA are now
well established and growing, signing up more than
140 million subscribers so far, run by 113
operators in 50 countries and regions worldwide.
The Chinese government is hoping that all
products, ranging from base stations to mobile
phones, will be ready for commercial use by the
middle of this year.
According to an
industry insider, the National Development and
Reform Commission (NDRC) submitted a proposal to
the State Council last November suggesting that
China Telecom and China Netcom adopt the TD-SCDMA
as the major standard in 3G networks. Many
parties, including the Ministry of Information
Industry (MII) and the state-owned Assets
Supervision and Administration Commission (SASAC),
are involved in the 3G decision-making. The NDRC's
proposal is just one of the plans on the table for
discussion.
If the ongoing TD-SCDMA trials
do not go well, China Telecom and Netcom will
bundle the WCDMA and TD-SCDMA, as they complement
each other technically. Beijing-based research
group Analysis International believes operators
will be reluctant to build and run a pure TD-SCDMA
network because of the question marks lingering
over the prospects of the standard. Ye's remarks
underline China Telecom's growing anxiety about
the possibility of a government-imposed standard
that has yet to be proved fully viable.
Ye
also urged the government to give the green light
to China Telecom and China Netcom to conduct
cellular business. "It's unreasonable that only
two firms are offering cellular services," he
said. "It's better to award three or four
operators with 3G licenses." China Telecom and
Netcom are eager to move into the cellular market
as the fixed-line business is slowing down and
nearing saturation. Ye said the number of cellular
subscribers in the Chinese mainland, recorded as
330 million at the end of last year, would almost
double by 2006.
Of late, there have been
signs that the Chinese government might hasten 3G
mobile telecommunication after years of caution.
Information Industry Minister Wang Xudong last
month sent out a clear message that the
development of 3G was firmly on track. Wang told
the ministry's working conference that the
ministry, in collaboration with other government
bodies, would make suggestions to the State
Council regarding the development of 3G in China
at an "appropriate time" this year.
It was
the first time that the Chinese government mapped
out a time-frame for its 3G strategy. Interest,
therefore, developed rapidly in the industry, with
the growing belief that 3G's introduction in China
was imminent. However, several questions remain
unanswered in such a scenario, such as the
maturity of 3G standards and the nature of
licenses that need to be issued. "From a technical
perspective, I believe that among the three 3G
standards, both WCDMA and CDMA 2000 are becoming
mature and can now be rolled out for commercial
use," Zhang Zhijiang, general manager of the
Department of Technology of China Unicom, told the
media. "The conclusion is based on 3G trials
organized by the ministry in the past few years."
China Unicom operates both GSM (global
system for mobile communications) and CDMA
networks and is expected to adopt the US
Qualcomm-based CDMA 2000 while switching its
current networks to 3G. "We are ready to do the
network migration after we obtain a 3G license,"
he said, adding that China Unicom was closely
monitoring 3G development to ensure a quick
response. Zhang said it would take about six
months for China Unicom to upgrade its current
2.5G networks to 3G.
For China Unicom's
GSM users, the company is currently using GSM 1X
technology to enable its GSM users to access CDMA
networks, characterized by their speedy wireless
Internet connections and fast wireless date
transmission. China Unicom has so far signed up
more than 100 million mobile subscribers,
including GSM and CDMA users.
China
Mobile, the world's largest mobile carrier in
terms of subscribers, is likely to land a 3G
license based on WCDMA, which is regarded as a
natural upgrade for GSM to migrate into 3G. Zhang
expected China Mobile to take nine to 12 months to
upgrade its current network to 3G. "My guess is
mid-year, or at the completion of the next phase
of TD-SCDMA tests. At least two licenses will be
awarded initially (WCDMA and CDMA 2000) with more
likely to follow at a later date," said Michael
Thelander, founder and chief executive officer of
US research house Signals Research Group.
"A TD-SCDMA license will be awarded at
some point, probably fairly early in the process,
but it is not clear to me if it will be one or two
licenses or if it will be a nationwide or regional
license," he said. "Assuming that a TD-SCDMA
license is awarded initially, I believe that the
government will award at least three licenses," he
added. Thelander said he believed another factor
that could determine the number of licenses is
what the government does regarding the number of
operators and whether or not it merges or splits
the existing operators. He believes China Tietong
needs funding, perhaps from a partner, before it
can deploy a 3G network.
With continued
government support, TD-SCDMA has witnessed rapid
progress over the past year. Sources from the
China Academy of Telecommunications Research under
the ministry said that the Chinese government
would conduct the third phase of commercial tests
for the three 3G standards. All six major telecom
operators, including China Mobile, China Unicom,
China Telecom, China Tietong and China Railcom,
will take part in the test, starting at the end of
March, which will mainly focus on TD-SCDMA.
Huawei, ZTE, China Putian and Datang are
among the equipment providers involved in the
test. According to Huawei, this round of tests
will focus on handsets, chips and TD-SCDMA's
compatibility with the two other 3G standards.
Tests for WCDMA and CDMA 2000 are supplemental, as
previous tests in the second phase proved that the
two standards are comparatively mature. "We are
quite confident that the commercialization of
TD-SCDMA will be realized in June this year," said
an official from Datang Mobile Communications
Equipment Co Ltd.
According to the
official, who wished to remain anonymous, more
than 10 handsets supporting the TD-SCDMA system
will be launched in June. As one of the
internationally acknowledged 3G standards, the
Chinese government has allocated 155-megahertz
frequency resources to support the domestic
standard. "I believe that licenses will be issued
depending on the maturity of TD-SCDMA and how
successful WCDMA is in major markets outside
China," said X J Wang , a senior analyst with
Yankee Group.
He said he believed that the
Chinese government is skilled at using regulations
and policies to promote and secure its national
interests, the promotion of TD-SCDMA being an
ideal example. "There is nothing wrong for a
country's top regulator to protect its national
interest and my impression is that the government
has generally done a good job," he said. "However,
I would encourage more transparency in terms of
overall policies. The issuing of 3G licenses
particularly requires more transparency, which can
help foster a healthier investment environment,"
he said. He added that China's 3G licenses are
expected in the first half of 2005, but they may
even be pushed back to 2006 or later.
But
Credit Suisse First Boston (CSFB) has announced
that it expects the Chinese government to issue 3G
licenses in the fourth quarter of this year. As
the world's largest telecommunications market,
China has become a market for almost all 3G
equipment providers and terminal producers feel
compelled to take part in it, such as Motorola,
Nokia, Siemens, Nortel Network, Ericsson, Huawei,
ZTE, Samsung and LG. Siemens, for example, claims
to be one of the best 3G solution providers as it
is involved in two of the three 3G standards -
WCDMA and TD-SCDMA. "We are carrying out our 3G
investment and development step by step," said Gao
Yan, senior vice president of Siemens (China)
Mobile Communications Ltd. "We maintain our
position by sticking to the two standards," a
situation that enables Siemens to have a "unique
position" in China's wireless market, he said.
(Asia Pulse/XIC) |
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