China 3G: Now in 2008?
By Carlo Longino, Mon Jun 06 22:00:00 GMT 2005

A report out of China has a government official promising 3G service by 2008, and also says the country's homegrown third-generation standard might not be as homegrown as it would like.

The Chinese mobile industry's been sitting on its hands when it comes to 3G licenses. Operators have been saying for a while now they're ready to start spending on upgrades -- if only the government would award the licenses. China's Ministry of Information Industry (MII) has never come out with a concrete timetable, with estimates once at the end of 2004, then mid-2005, then end 2005... and now, an MII official says "China promises to provide 3G service by 2008."

The Chinese report goes on to say that operators there aren't in a hurry to launch 3G, something previous news doesn't appear to back up. The continued pushbacks are widely believed to be tied to problems with the development of the TD-SCDMA 3G standard, which was supposed to provide Chinese carriers and equipment manufacturers with cheap, royalty-free technology to reduce costs and quicken the country's 3G rollout -- and of course, give Chinese companies an advantage in the market.

But the report raises an interesting point: TD-SCDMA may not be as royalty-free as many people previously believed. An MII report says that Western vendors Nokia, Siemens and Ericsson hold roughly two-thirds of the patents utilized in the TD-SCDMA standard; by comparison, China's Datang holds just 7 percent. Evidently Qualcomm's demands for the relevant patents it owns have held discussions with China over its standard stagnant for more than a year.

So where does this leave TD-SCDMA? It's unclear, just like the state of Chinese 3G. If the patent situation can't be worked out, there's little reason to use TD-SCDMA (assuming it's ever technically feasible, which still remains to be proven), beyond an attempt at outright protectionism. But rest assured that if and when it does become beneficial for them to do so, Western vendors will support it. Their entrance into the market may be another situation, like in mobile handsets, where Chinese vendors may find it hard to compete against their foreign rivals.