China's 3G Mobile Phone Mess??

BusinessWeek had a article that said China's 3G Mobile Phone Mess.

Is it a mess? I don't think so. Actually it is a great oppertunity for China to push China's technology into a higher level.

China developed TD-SCDMA is one of the only three international standard for the third generation (3G) wirelss telecommunication. The other two are CDMA-2000 developed in US and WCDMA developed in Europe. Since the telecommunication equipement makers are more mature and have a lot more technology support from the related industry, such as IC and software companies. It is understood that the development of the China's standard is slower than the other two.

Western companies have been waiting for China government to award the licenses to service suppliers so that they can sell their equipment. But apparantly China government will not do so until 2008. It is obvious that China government is waiting for the development of TD-SCDMA.

Today, China's TD-SCDMA is almost ready. With the development of this new technology, some new tech companies appears in China, such as the IC design in Chongqing and Shanghai. Some China's telecommunication equipment makers get boost, such as ZTE, Huawei, Datang, Putian.....

Shanghai, Beijing, northern city of Baoding, southern city of Xiamen and eastern coastal city of Qingdao have been trying the new technology for a while, and China government decided to add 5 more cities in the larger scale of trials. The 5 cities are Tianjin and Qinhuangdao in the east, Shenzhen and Guangzhou in the south and Shenyang in northeast. (Source)

China Mobile Communications, the largest wirelss service company in the world, will be responsible for building and maintain the trial networks in the latter 5 cities.
CMCC is already testing the home-grown TD-SCDMA standard in Xiamen, while fixed-line carrier China Telecom operates trial TD-SCDMA networks in Shanghai and Baoding. No 2 fixed-line telephone operator China Netcom is testing the technology in Qingdao and Beijing. (Source)

China Mobile officially launched bidding for TD-SCDMA equipment contracts totaling over RMB 20 billion ($2.58 billion) in preparation for the construction of large-scale TD-SCDMA trial networks in China on March 19.

"TD Tech, a joint venture between Huawei and Siemens, will bid for the access network equipment contract, while Huawei will bid for the core network equipment contract," the Huawei source said.

According to sources from Datang Mobile and ZTE, ten equipment makers will directly or indirectly participate in the bids. They are TD Tech, Huawei, ZTE, Ericsson, Putian, Nokia, Datang Mobile, Alcatel Shanghai Bell, Guangzhou New Postcom Equipment Co. Ltd. and Wuhan Fiberhome Mobile Communication Inc..

"Datang Mobile, ZTE and TD Tech have advantage over the other vendors. The Chinese vendors should account for about 85 percent of China Mobile's contracts," Chen from TD-SCDMA Forum said.

Datang Mobile and ZTE are likely to each obtain 30 percent share of the contracts, Chen said. (Source)

The China trial is said to cover 80 million to 100 million people, about a third of the population of the US. It will involve an infrastructure cost of about $4bn, and it will cover nine cities including, incidentally, those which host Olympic events.

So the WTO is fobbed off, TD-SCDMA gets a head start, the government gets to keep its commitment to ‘make the Olympics a 3G event’ and, by the time the government has to keep faith with the WTO by licensing other standards than TD-SCDMA, the 100 million potential subscribers who matter, i.e. the ones in the big rich cities, will have been exposed to TD-SCDMA for some time.

Furthermore, the government can wait until it is convinced that TD-SCDMA is technically robust and sufficiently established in the market to either see off the foreign standards, or at least compete satisfactorily against them. (Source)

Until now, you can understand why China government delay the rewarding of the 3G license, why build such a big scale "trial" networks, and why China Mobile is selected. There is no mess in it at all. All Chinese are doing is promoting domestic technology, promoting domestic companies. China is not satisfied with the title of "large manufacturer", China wants to be a strong and powerful one.

Of cource China will not stop at 3G, China is working on 4G wirelss networks now. (Source)