Telecoms sector receives 3G boost
By Li Weitao (China Daily)
Updated: 2006-01-23 05:40

TD-SCDMA, a home-grown standard for third generation (3G) mobile communications, is already mature and ready for manufacturers to move ahead with production, the Ministry of Information Industry (MII) said in a statement.

The Chinese Government has issued specifications for TD-SCDMA, as part of its efforts to facilitate the development of the standard for 3G mobile communications.

The standardized specifications for the infrastructure will help speed up network trials and interconnection tests, as well as the eventual commercialization of Chinese 3G technology, MII said in a statement released late on Friday.

3G telephony offers higher mobile data speed, supporting bandwidth-hungry applications such as full Internet access and video calls.

TD-SCDMA time division synchronous code division multiple access competes with Europe-initiated WCDMA and US-backed CDMA 2000.

The decision comes at a time when TD-SCDMA, which has lagged behind rival standards, is gaining increasing momentum.

In the past months, a number of industry players including Ericsson and Nokia have jumped on the TD-SCDMA bandwagon.

For instance, the TD-SCDMA Forum, formed in 2000, now has more than 420 members.

Deputy MII chief Xi Guohua has said TD-SCDMA networks should be run by "competent" operators such as incumbent fixed-line giant China Telecom or the world's largest mobile operator China Mobile.

However, another senior MII official also acknowledged that "there are a lot of uncertainties" over TD-SCDMA, given the slow negotiations between China and foreign technology vendors over patents.

China's Datang Telecom, the major developer of TD-SCDMA, owns most of the core patents, but some foreign companies also claim some patents.

China needs to give substantial support to TD-SCDMA to reduce reliance on foreign technology vendors, the anonymous official said.

"Chinese companies need to pay royalties to foreign vendors which amount to 15-20 per cent of sales of their WCDMA equipment," he said.

"That makes domestic firms much less competitive as the average profit margin of these companies is only around 5 per cent."

TD-SCDMA, once commercially operational, will offer big opportunities due to the large mobile phone subscription base in China.

According to statistics released by the MII late Friday, 58.6 million mobile phone users were signed up in 2005, which brought the total number of subscribers in the country to 393.43 million.

The number of fixed-line subscribers had hit 350.43 million by the end of last year.

Fixed-asset telecoms investment decreased by 4.8 per cent to 203.34 billion yuan (US$25.42 billion) last year.

The number of broadband Internet subscribers was 37.50 million.

(China Daily 01/23/2006 page1)