China Gains Important Ally in 3G Phone Fight

August 30, 2006 - source: BWCS

Korean mobile giant, SK Telecom is to assist in developing China s own, domestically developed 3G standard, according to reports from Seoul. The Chinese government has apparently signed an alliance with SK Telecom which will see the Korean company trial and develop the Chinese TD-SCDMA standard for next generation mobile phone services.

Earlier this year, SK Telecom paid US$1 billion for convertible bonds which entitle it to a 6.7% stake in China Unicom, China s second largest mobile operator. At the time the Koreans said they would work with Unicom to develop new handsets, new technology and new services. The Chinese government is keen to put some overseas backing behind its domestically developed 3G standard, knowing it will have to compete with the already well-established W-CDMA and CDMA standards preferred by most other mobile companies.

SK Telecom will also act as a counter-weight to the foreign mobile phone companies using existing technologies, such as PCCW and Telefonica, who are currently forming alliances with local operators to gain entry to the Chinese market.

Under the terms of the agreement, which was announced today, SK Telecom is committed to testing the Chinese standard in Korea before the June 2007. China plans to introduce the 3G service before the start of the 2008 Beijing Olympic games. The Chinese government has long been rumoured to be on the verge of issuing 3G licences and the latest news is that these will be handed out within the next six months.

In February of this year, the Chinese government asked China Mobile and the fixed-line operators China Netcom and China Telecom to carry out trials of the TD-SCDMA standard.