x

China's Long March to 3G

China -- the world's largest cellular market -- is slowly rolling out next-generation wireless services. But issues surrounding the type of technologies used and the companies that will be involved still loom large on China's path to 3G.

The only two major operators on the Chinese market, China Mobile Communications Corp. and China Unicom Ltd. are, respectively, rolling out general packet radio service (GPRS) and code-division multiple access (CDMA) networks. Both China Mobile and Unicom already have GSM networks in place, but Unicom is committed to CDMA for future upgrades.

China Mobile is the larger of the two companies with more than 76 million subscribers on its GSM network, compared to nearly 32 million on all of Unicom's networks. The bulk of Unicom's subscribers are on its legacy GSM network; it only launched the CDMA network in January this year, and it has so far gained fewer than 1 million users. However, Jiangbo Zhou, senior manager of the IR department at Unicom, speaking at the Lehman Brothers' Global Wireless conference in New York City this week, said that early problems with handset supply had now been sorted out.

As it stands, there is little reason for the incumbents to move to third-generation networks. Data services are on their radar, but not a key issue in a country where simply building a wireless footprint is a mammoth undertaking.

"We understand data services are the future," Zhou told the conference. Unicom is accordingly working on WAP services and other applications. But, for the moment, "SMS is king," according to Zhou.

"There is no time frame for 3G [in China]," says Shiv Putcha, an analyst with Yankee Group's wireless mobile Asia-Pacific group. He does not expect licensing auctions before 2003. The government might then actually sell licenses to new entrants to the market, China Telecom and China Netcom Corp. Ltd., Putcha says.

However, the licenses might well come with strings attached, forcing the licensees to use China's home-brewed third-generation standard Time Division Synchronous Code Division Multiple Access (TD-SCDMA). The standard, which has been developed over the last few years by the Chinese Academy of Telecommunications Technology (CATT), is innovative, combining the older Time Division Multiple Access (TDMA) with Time Division Duplexing (TDD) techniques championed by companies like ArrayComm Inc., making for a system that is more spectrally efficient and cheaper to implement than GSM, for instance, although it has less range.

However, with the rollout of their GPRS and CDMA networks, China Mobile and China Unicom are basically committing themselves to Universal Mobile Telecommunications Service (UMTS) and CDMA2000 rollout paths, respectively, Putcha says. So, he expects that -- after all the R&D work that has been put in -- the Chinese government could make the use of TD-SCDMA technology a condition of 3G licenses issued to new operators.

However, even without 3G, China is still the market that has international operators, equipment vendors, and handset makers drooling. This comes as no surprise, as China's Ministry of Information said this week that the number of mobile subscribers increased by 6 million to 167 million in April. That's a penetration rate of around 13 percent, folks. Plenty of room for growth there.

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com
Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE