[December 28, 2005]

Time is Mature for 3G

(Comtex Business)BEIJING, Dec 28, 2005 (SinoCast China IT Watch via COMTEX) --It's time for China to issue third-generation (3G) telecom licenses, Xi Guohua, vice minister of the Ministry of Information Industry of China said on December 26.

At the present, China is adding about 5 million new mobile phone subscribers every month. Unless 3G licenses are issued soon, there will be a huge waste for consumers and telecom operators as their mobile phones and equipment will be outdated, Xi said in Beijing.

He said the technologies for the 3G network and mobile phone terminals have been tested. Issuing 3G licenses will be a good chance to encourage competition in China's telecommunications industry.

The third-generation technology network provides higher- speed data transmissions via mobile phones and allows users to watch videos, play 3D games and conduct videoconferences.

China is expected to issue 3G licenses at the start of next year, and telecom operators will be appointed to build networks based on three technologies -- the European wideband-CDMA, the US-based CDMA2000 and the homegrown TD-SCDMA.

Network testing on the TD-SCDMA standard finished this year and it is ready for commercial use. Six major 3G system equipment providers -- Datang Mobile, TD Tech, ZTE, Putian, Alcatel-Shanghai Bell and Nortel -- have developed four sets of system equipment and participated in the network testing.

China's 3G equipment market will reach CNY 60 billion annually in 2006, and second-generation equipment will be phased out of the market by 2010, according to earlier reports.

Xi said the voice costs of 3G are only half 2G technology, but the production costs for 3G mobiles are more than double 2G ones.

Chinese telecom carriers such as China Telecom have long been using Datang Telecom's equipment in the hopes of upgrading to TD-SCDMA easily.

It is possible for the Chinese Government may adopt TD- SCDMA to build up main networks in major cities, with WCDMA networks as supplement in small and mid-sized cities around the country, industry experts predicts.

The CDMA2000, which is one of the three global 3G standards along with TD-SCDMA and WCDMA, is likely to lose ground in China, as the Chinese government is leaning to WCDMA and the homegrown TD-SCDMA, said some Chinese sources on August 31, 2004.

The European Union has given the green light to cooperation between WCDMA and TD-SCDMA that is owned by China-based telecom equipment maker Datang Telecom. And it is a two-win result for the two standards, according to Chinese telecom analyst Lu Yanjie.

Still, the EU has given voice to its support on the integration of WCDMA and TD-SCDMA and China hopes European telecom equipment makers and telecom carriers will help their Chinese counterparts to make TD-SCDMA maturer.

EU's support will give China's homemade 3G standard a strong leg up. However, some industry watchers take a different viewpoint that it is meaningless to talk about any 3G standards for the 3G markets in China is still in its infancy.

The adoption of WCDMA and TD-SCDMA would be a bad news to CDMA 2000 that is owned by US-based Qualcomm, because it might be losing the most potential and lucrative 3G markets in the world.

China Unicom is based on Qualcomm's CDMA technologies, though. It merely takes a small fraction of China's mobile telecom market. China Mobile, the largest mobile telecom carrier in China, is holding majority of the market based on its GSM and GPRS networks.

(USD 1 = CNY 8.0802)

From Communication Industry Weekly, Page 1, Tuesday, December 27, 2005
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