The latest chapter in the long-running Chinese 3G technology saga has seen Wideband Code Division Multiple Access (W-CDMA) tipped as the potentially dominant standard of choice (see What's Up With Chinese 3G?).

China currently has over 221 million mobile users and adds around four million new subscribers a month, making it the largest single cellular market in the world. Growth figures like these have network infrastructure suppliers and handset manufacturers waiting with baited breath to see which 3G standards the Chinese will pick.

Although the Chinese government has yet to confirm which technology will get the green light -- W-CDMA, CDMA2000, or the homegrown TD-SCDMA (Time Division Synchronous CDMA) -- it is widely assumed thatfour 3G licences will be awarded.The favorites to win 3G business are incumbents China Mobile Communications Corp. and China Unicom Ltd., as well as fixed-line players China Netcom Corp. Ltd. and China Telecommunications Corp. (NYSE: CHA).

According to a report from Norson Telecom Consulting, China Unicom is the only carrier expected to “forge ahead in a minority position with CDMA2000,” leaving the remaining three operators to begin building W-CDMA networks “with elements of TD-SCDMA.”

“China Telecom…has halted TD-SCDMA testing and shifted its focus to W-CDMA,” notes the research house. “China Netcom, in line with strategic partner Singapore Telecom, has also shown a preference for W-CDMA. TD-SCDMA deployment will remain minimal with the standard merging gracefully into the W-CDMA family.”

The findings mark a significant turnaround in market sentiment. It was originally believed that the Chinese government would opt for a CDMA2000 majority, before talk later turned to a more likely split of two W-CDMA and two CDMA2000 contracts (see Chinese 3G: Open to All?).

The W-CDMA air interface is part of the Universal Mobile Telecommunications Standard (UMTS), which has already been adopted as the European 3G standard. Used with existing Global System for Mobile Communications (GSM) core networks, the theory goes that W-CDMA-compliant handsets and base stations can increase wireless data transfer rates to a maximum of 2 Mbit/s.

CDMA2000 technology is a packet-based extension to CDMA networks that can theoretically support data rates of 144 kbit/s.

Developed by the Chinese Academy of Telecommunications Technology (CATT), TD-SCDMA combines older Time-Division Multiple Access (TDMA) with Time-Division Duplexing (TDD) techniques of broadcasting over a single chunk of spectrum rather than the normal two bands.

Analysts at Norson do not expect 3G licences to be issued until the second half of 2004. “With few successful examples of 3G launches worldwide, the Chinese government will not likely rush into a domestic 3G launch, preferring to keep Chinese operators away from the ‘bleeding edge’ until 3G technologies and business models mature.”

— Justin Springham, Senior Editor, Europe, Unstrung