China’s 3G delayed
Today in Xinhua, a brutally honest assessment of the delay to issue 3G mobile licenses in China (from Shenzhen Daily):
China has again delayed the issue of licenses for third generation, or 3G, phones until late 2006 or 2007.
Since 2002, the telecommunications industry has lost count of the number of times China has delayed the issue of 3G licenses. The industry had thought the nation’s first 3G licenses might be issued May 17, World Telecommunications Day, but nothing happened.
If you’re not familiar with the 3G landscape, this is the most important part of the article:
There are three available 3G technologies, which provide high transfer data speed and allow users to download movies and hold video conferences on cell phones. They are the U.S.-developed CDMA2000 (Code Division Multiple Access 2000), European-developed WCDMA (Wideband CDMA) and China’s TD-SCDMA (Time Division-Synchronous CDMA).
Analysts said China will issue a national TD-SCDMA license first, then issue two other licenses later to support the homegrown standard. China’s standard is not fully ready for commercial use, which forced the government to delay issuing the licenses.
TD-SCDMA is a mouthful, but it’s important to the creation of a homegrown standard, not unlike what Japan did with PDC or the US did with CDMA in their 2G expansions.
May 30th, 2006 00:27
When in China politics gets involved, getting an idea of what is really going on might be tough. It looks a bit like a classic Western where you see dust coming up at the horizon and thunder is rolling near, without knowing whether it is the Indian, the buffalo’s or the Army causing the mayhem.
The stakes are very high and some have an interest to do as if all is well, others to do as if TD-SCDMA will not take off at all.
Because of the high political stakes, TD-SCDMA will get a head start, unless it is technically really a disaster. Much delay is also not possible anymore, since the systems has to be up and running by the Olympics in 2008. To get a bit of a subscriber-base, a year time seems to be a minimum.
May 30th, 2006 00:36
Yes the Olympics deadline is a good point, as there will need to be a roaming infrastructure in place for the other standards too.
Human beings work best with deadlines, and I think most people in Beijing are already asking themselves, what happens after 2008?!
It will almost be like life has no more meaning after the August Olympics.
December 12th, 2006 16:03
Hello, I have an article below you might be interested:
A Rational Allocation of China’s 3G Wireless Licenses
The participants of the ITU Telecom World 2006 event held in Hong Kong left for home disappointed. Many of them expected a big announcement by Chinese government officials about the award of the third-generation wireless licenses. It was not to be.
Analysts and telecom equipment manufacturers still wonder how China is going to choose among the three international 3G standards, this is, WCDMA, CDMA2000 and TD-SCDMA. The last is China’s own standard that the government would like to be adopted by at least one of its companies.
The Chinese government’s hesitation is understandable. China has right now four big telecom companies: China Mobile, China Unicom, China Telecom, and China Netcom. Mobile and Unicom are the two current 2G mobile operators, while Telecom and Netcom two fixed-line service providers without a wireless license.
If it were truly left to the companies themselves to decide, it is very likely that Mobile would likely choose WCDMA because it already has 2G GSM, Unicom would possibly select CDMA2000 because it owns a 2G CDMA, Telecom and Netcom both would likely prefer WCDMA.
TD-SCDMA would be left without being the choice of any of the four companies. Obviously this would not be the scenario the Chinese government would like to see.
Some insiders have speculated that China Mobile may opt for the TD-SCDMA standard, with possible government incentives. This plan could have potential drawbacks. One is that the shareholders of Mobile would not necessarily be happy because of the risk of failure in implementing the totally new TD-SCDMA standard. Second, the Chinese government is also most likely under pressure from the United States and the European Union to allow telecom providers to make their own choice.
Below I propose an alternative way of allocating 4 licenses to the 4 companies without the government requiring that any particular company choose TD-SCDMA.
First, the government says that it will issue 4 licenses in total: two WCDMA, one CDMA2000, and one TD-SCDMA.
Second, the government put up the two WCDMA and one CDMA2000 licenses for biding. The four companies bid for a license they most want. This means that they have to pay in order to get what they desire. This is not a new idea. In fact, some telecom providers paid huge sum of money to get a 3G license in UK, Italy and Germany a few years ago.
Third, the company that did not win a desired license will be given TD-SCDMA for free.
Fourth, the government will have options in terms of what to do with the money collected from biding. It is likely to be a large sum. It could choose to keep the money, distribute to the companies equally, or give it all to the company that is left with TD-SCDMA.
I will recommend that the government keep the money to avoid any impression of favoritism
One likely scenario could be as follows: Mobile and Telecom would each bid for a WCDMA by paying something like 6 billion US dollars a piece, while Unicom would get a CDMA200 for maybe 4 billion US dollars. Then Netcom would choose not to match the others and instead, receive a TD-SCDMA for free.
It is also possible that any of the other three companies may opt for a free TD-SCDMA license. And the government would get 16 billion dollars in any case.
In this way, all four companies would be happy. Their shareholders would accept it. The United States and European Union will not have anything to complain about.
FROM: http://bohaicircle.blogspot.com/2006/12/rational-allocation-of-chinas-3g.html .
March 18th, 2007 07:34
Dear Andrew,
I use to read your blog and I like it very much. Actually I have moved to Shenzhen only for 2 weeks and I need some advice about which Broadband service should I get. I use to access foreigner websites and download from overseas. I got the China Telecom service but is too slow. Could you please advise me about which should I change to?
Best regards,
Alexandre Tse.