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Chinese government to increase funding for 3G TD-SCDMA

November 10, 2003

It is expected that the Chinese government will invest a further 1.4 billion yuan (US$170million) for the development of the home-grown 3G mobile network technology, a local newspaper reported. The decision could be announced at a telecoms expo in Beijing this week.

The investment further strengthens China's ambition to launch 3G networks based on its TD-SCDMA technology, developed by Datang and its German partner Siemens.

"The National Development and Reform Commission, the Ministry of Science and Technology and the Ministry of Information Industry have a project to invest 1.4 billion yuan more into our TD-SCDMA Industry Group soon," said Qu Guangfeng, an engineer at Datang Mobile Communications.

Meanwhile, Ministry of Information Industry (MII) Science & Technology Committee vice chairman Chen Ruming said in an interview with Dow Jones that China will likely let operators choose its own 3G mobile technology to deploy to foster increased competition. He said, "The competition level now is too low."

The comment will surprise many in the industry as it was previously thought that China would force some operators to adopt TD-SCDMA technology as part of the 3G license requirements. Chen also said that WCDMA and TD-SCDMA can complement each other.

He did not say when China would award 3G licenses but did expressed, "The 2004-2005 period will be very important to 3G development in China."

The two current mobile service providers are expected to deploy different 3G technologies in the future. China Mobile, which uses GSM network, is expected to develop3G services through WCDMA technology. China Unicom is using a mixture of GSM and CDMA networks for its 2G network but is anticipated to take the CDMA2000 route.

Chen agreed that two 3G licenses would be too few and opportunities should be given to fixed-lined operators to enhance competition. China Netcom and China Telecom could be future players in the 3G mobile industry.

 


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