Domestic Problems Grow for China's 3G

June 22, 2005 - source: BWCS

China's home-grown 3G standard, the TD-SCDMA system, appears to have suffered another serious set-back, according to the China Daily website. The domestic rival to the largely European W-CDMA and the rival CDMA technologies has reportedly performed poorly in a recent series of government-sponsored trials. The news will come as a major disappointment to local Chinese companies hoping to do well from China's own standard. It may also help to delay the award of 3G licences in China.

While the standard is said to have supported voice and text messages very well in the trials, it apparently fell down on the delivery of more sophisticated multimedia services, which have become the main selling point for 3G. One industry source, quoted by China Daily, claimed "The chips of TD-SCDMA mobile phones do not support well the 3G value-added applications." The technology trials have been carried out by the China Academy of Telecommunications Research, which itself acts under the auspices of the Ministry of Information Industry (MII).

The TD-SCDMA system also fell short of expectations when it came to demonstrating interoperability (IOT) between terminals. Last year the Chinese government said that all TD-SCDMA products would be ready for commercial use by the middle of 2005. In fact the trials, which were due to be completed by the end of this month, will now likely be prolonged.

Beijing is unlikely to comment officially on the tests for some time, but, unofficially, the MII appears to believe that it will take at least six months to iron out the problems in the new standard.

The poor showing of the Chinese system in these recent tests will certainly undermine confidence in the new technology and many analysts believe it will lead to further delays in the process of awarding 3G licences in China. However, the readiness of the TD-SCDMA standard, or otherwise, is not the only factor likely to delay 3G in China, many industry pundits believe a widespread reshuffle of the indigenous telecoms market is on the cards before any franchises are handed out. There are also ongoing disputes regarding intellectual property rights between local Chinese companies and western investors which need to be ironed out before 3G can be launched in the People's Republic.