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Chinese CEOs urges to do more on application services
March 17, 2003
China's telecom carriers still have a long way to go to find an
effective business model that would enable a successful launch of
3G services, according to one of the country's telecom equipment
makers. Nevertheless, the government is expected to issue 3G licenses
in 2004.
"Today, there aren't enough people working on applications, and
that is a pity," said Wei Shaojun, president and chief executive
officer of Datang Telecom Technology (DTT), which is part of a corporate
group that helped develop China's 3G standard. "We can have a handset
with a beautiful screen and a camera, but that's not enough. With
such an expensive handset, [subscribers] want to know what services
they can get. This is the key issue."
The Chinese government has congratulated itself on a conservative
approach to the 3G era, pointing to European telcos sagging under
the heavy debt-load of 3G licenses as something China was able to
avoid. Even so, like many countries considering 3G, China has not
made much headway on applications and is lacking a driving force
in that area.
"Who will play the leader? China Mobile has enough power but, unfortunately,
today they are not doing that. They are waiting," Wei said. "Even
if they want to do that, they have to solve the problem of how to
develop applications according to the environment of different provinces.
They need to consider the scale of China. It is so big and has many
different cultures, so to meet the requirements of all these different
groups is very challenging."
In some ways, uncertainty over when 3G licenses will be issued
is having an impact on development, too. No firm timetable has been
set, leaving industry players trying to divine what the government
will do and when.
Many industry observers within China believe the Ministry of Information
Industry is stalling for time, in order to enable DTT's sister company,
Datang Mobile, to rally industry support around China's standard,
known as TD-SCDMA, and to come up with network backbone equipment
and end-user handsets.
Wei said commercial 3G trials are likely this year. Next year,
the government should issue licenses that would enable a rollout,
he said. Wei termed 2004 "very important" if greater competition
is to take place among the main fixed-line and wireless providers
in China.
The DTT president also believes that three 3G standards can coexist
in China, the only place in the world where that is set to happen.
The nation's two wireless providers-China Mobile and China Unicom-today
use GSM/GPRS and CDMAone/cdma2000 1x. But the government has encouraged
development of TD-SCDMA so that Chinese companies would have a stake
in the intellectual property of wireless communications. Datang
Mobile has been the tool to commercialize that strategy and some
industry watchers here surmise that one of the nation's fixed-line
providers will be compelled to use it.
So far, Datang Mobile has worked with Siemens on backbone network
equipment and spurred the development of a handful of foreign-dominated
joint ventures that are developing chip sets, reference designs
and handsets. A few of the companies that have signed on include
Philips, Samsung, Nokia, Texas Instruments and Motorola. ZTE Corp.,
a major Chinese network infrastructure provider, is also working
on TD-SCDMA.
TD-SCDMA now is one of three 3G standards approved by the International
Telecommunication Union. Its backers say that it is more bandwidth-efficient
than competing technologies and, thus, highly suited for deployment
in densely populated Chinese cities. It is also at least 20 percent
cheaper to implement, they say.
Still, some doubt whether a standard that is largely still in the
lab will be able to compete against the more-entrenched competitors:
wideband-CDMA and cdma2000 1x EV DV. Wei thinks it will. "TD-SCDMA
will take market share because it is Internet-oriented," he said.
"And 3G is all about communicating with the Internet."
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