TD-SCDMA, a Chinese home-grown standard for third-generation (3G) mobile telephony, is set to dominate the country's 3G market, an industry group said.
And foreign equipment and handset makers need to get more involved in this locally developed standard or lose in the world's largest mobile phone market by subscribers, said Chen Haofei, secretary-general of TD-SCDMA Forum.
"I believe many foreign companies have misjudged (the prospects of) TD-SCDMA," he told China Daily.
TD-SCDMA has long been lagging behind the better-established foreign standards WCDMA and CDMA 2000 and lacking support from foreign companies. But a strong backing from the government has significantly helped it to mature and give it an edge over foreign rivals.
China Mobile Communications Corp (CMCC), parent of Hong Kong-listed China Mobile Ltd, is now expanding a trial of TD-SCDMA to six cities from Xiamen in Fujian Province, with a budget of 30 billion yuan for the expansion. That's an indication of the head start TD-SCDMA is getting.
The Chinese government has yet to formally award operators licenses to build 3G networks. Once that happens, it will result in billions of dollars in contracts.
Chen said the expanded TD-SCDMA trial is actually a soft launch of commercial 3G in China, something like "doing it without licensing".
Foreign telecom firms such as Ericsson and Nokia have been betting big on WCDMA though they have tied up with some local companies in developing TD-SCDMA.
But they have not won many orders from the trial as they did not pool enough resources in developing the local standard, Chen said.
China Unicom in 2001 started building a cellular network based on CDMA, a 2G standard developed by US wireless firm Qualcomm. Around 30 billion yuan was spent on the first phase of the network.
Compared to CDMA, CMCC's spending on the TD-SCDMA trial is already a "decent figure", said Chen.
He said he expected CMCC will focus on fine-tuning the TD-SCDMA networks before the end of next year and not much investment will be made on networks based on other foreign standards.
TD-SCDMA Forum forecast an additional investment of 20 billion yuan in building TD-SCDMA networks next year, with 40 billion yuan each in 2009 and 2010.
"Foreign companies need to get serious about TD-SCDMA as they are less likely to get anywhere with WCDMA and CDMA 2000 in the near future," Chen said.
He estimated CMCC will spend 4 billion yuan of the budgeted 30 billion yuan in procuring 2 million TD-SCDMA mobile phones from around October.
Big foreign handset makers except Samsung have yet to give full support to developing TD-SCDMA cellphones. Motorola has developed a model based on the Chinese standard. Nokia and Sony Ericsson have adopted a wait-and-see policy.
To profit from the opportunities brought about by TD-SCDMA, "foreign companies need to show a good attitude, at least to get a ticket to the TD-SCDMA game", said Chen, adding that TD-SCDMA is a neutral and open platform.
The TD-SCDMA Forum was established in 2000 by eight firms, including five Chinese companies and Motorola, Nortel Networks and Siemens.
(China Daily May 17, 2007)