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Homegrown 3G standard faces tough fight
(Shenzhen Daily/Agencies)
Updated: 2006-02-27 15:18

The government appears intent on building its homegrown third-generation (3G) mobile phone technology into a global standard. But TD-SCDMA, or Time Division Synchronous Code Division Multiple Access, is facing a pitched battle perhaps as long and torturous as its name - against two other standards already used by tens of millions of people.

TD-SCDMA, which the government helped develop but hasn't yet seen commercial use, boasts several advantages over the other 3G standards. For one, TD-SCDMA supports more users on a given frequency band than the other two standards: Wideband Code Division Multiple Access, or WCDMA, and CDMA2000.

But those strengths may be moot. "The real challenge is to achieve economies of scale ... rather than technical advantages," said BDA China Ltd. managing director Ted Dean.

China Mobile (Hong Kong) Ltd., the larger of the country's two mobile phone operators by subscribers, prefers WCDMA, said Lei Yu, the company's corporate communications manager.

"A lot of our existing network equipment can also be used on a WCDMA network. We'd have to write off more network equipment if we were to use TD-SCDMA," said Lei, who declined to provide comparative cost estimates.

Consumers may also have to pay more for TD-SCDMA mobile phones that let users use 3G services, such as watching video or finding a nearby restaurant, because phone makers produce more and possibly better-designed WCDMA or CDMA2000 phones, analysts say.

The larger scale of production for WCDMA and CDMA2000 handsets worldwide will likely make handsets based on the two standards more affordable for customers, though analysts wouldn't predict how much TD-SCDMA handsets would cost once they hit the market.

"If the government is bold enough to push for a standalone TD-SCDMA deployment, we think it will also make drastic moves to maximize the chances for TD-SCDMA's success," said ABN-Amro telecommunication analyst Helen Zhu in a research note.

Such moves include issuing a TD-SCDMA license six to 12 months before WCDMA or CDMA2000 licenses are issued, she said. Last month, the government made TD-SCDMA an official 3G standard for China, before anointing WCDMA or CDMA2000.

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