The government has given the green light to China Mobile Communications Corp (CMCC), parent of Hong Kong-listed China Mobile Ltd, to build a nationwide commercial trial network based on TD-SCDMA technology, a home-grown third generation (3G) mobile phone standard.

The Ministry of Industry and Information Technology (MIIT) has "approved a plan by CMCC to expand its current TD-SCDMA commercial trial network (in select cities) to a nationwide basis", a ministry spokesman told China Daily yesterday.

He did not provide a time frame for when China Mobile would start the expansion, however.

CMCC started commercial trials of TD-SCDMA in eight cities in April, including Beijing, Shanghai, Tianjin and Shenyang.

The approval for a nationwide commercial trial would increase the likelihood that China Mobile would be mandated to adopt TD-SCDMA to build its 3G networks.

CMCC has been showing a strong preference to WCDMA, a 3G standard developed mainly by European companies such as Ericsson, Nokia and Siemens. However, there have been rumors that the MIIT has rejected a plan by China Mobile to adopt both WCDMA and TD-SCDMA standards.

A CMCC spokesman confirmed that the group has already received the formal approval from the MIIT but insisted it "doesn't mean a 3G license has been issued".

The 3G licensing has been continuously delayed in China in the past few years, largely because the TD-SCDMA technology is less mature. Unlike its foreign rivals WCDMA and CDMA2000, TD-SCDMA has yet to be used in any commercial network in the world.

Given the fact that so far operators are not allowed to build WCDMA and CDMA 2000 networks, "the approval for the TD-SCDMA expansion underscores the government's increasing backing for TD-SCDMA", said Wang Guoping, an analyst with China Galaxy Securities.

Some industry observers say the trial network could be easily turned into a real commercial one once it is completed. This could give TD-SCDMA an upper hand as usually developing a nationwide network in China could take at least a year.

China Mobile has been under increasing pressure to embrace TD-SCDMA since Li Yizhong became the minister of MIIT in March.

The company has been criticized for not giving full support to the home-grown standard.

It was reported in June that Li had instructed CMCC to set a target to sign up more than 100 million TD-SCDMA subscribers within three years to ensure the success of the Chinese technology.

The expansion of the trial TD-SCDMA network could unleash large purchase orders, mainly to domestic equipment makers.

China Mobile has invested more than 14.6 billion yuan in the network built in the eight cities.

The TD-SCDMA trial network expansion could disappoint many foreign vendors, which have been less involved in developing the Chinese standard and has been counting on the WCDMA technology.

(China Daily August 19, 2008)