TD-SCDMA to fail by 2009

January 23, 2005

Beijing based technology market research firm Analysys International said high risk and competition will lead to the downfall of China's home-grown 3G mobile standard by 2009. TD-SCDMA was developed by Datang and Germany's Siemens but recent trials of the technology proved to be disappointing.

Analysys said mobile operators will be unwilling to take on the huge economic risks to build and run a pure TD-SCDMA network.

The report said operators such as China Telecom would roll out a combined WCDMA and TD-SCDMA 3G system, which would require massive funds and ultimately lead to failure.

"Handsets are playing a very important role for customers when choosing their mobile communication service," said Eagle Zhang, Analysys' telecom analyst.

Initially, only Chinese handset makers will supply TD-SCDMA products, with the exception of Siemens. This will lead to less variety, inferior quality, and higher prices, making TD-SCDMA less attractive for consumers, the report said

Zhang added, "Both China Telecom Corp and China Netcom will try their best not to bet on TD-SCDMA. They will try not to put too much energy or money into the network."

Despite the gloomy outlook of TD-SCDMA, equipment manufacturers cannot ignore the fact that the technology is a potential opening to getting into the lucrative mobile phone market in China. Earlier this week, China Putian and Nortel Networks announced a joint venture focusing on TD-SCDMA and WCDMA products and solutions.