China's 3G Timetable Murky As Homegrown Standard Falters

BEIJING -(Dow Jones)- A decision by China's government on positioning its homegrown third-generation mobile technology is one of the many issues still weighing on regulators as they continue to drag out the approval process for 3G licenses, industry participants said Wednesday.

Uncertainty has clouded the yearlong process of license approvals to China's major telecoms carriers as regulators carried out extensive field testing of the competing standards.

The new 3G technology which allows mobile phones and similar devices high-speed access to video and Internet connections is already popular in Japan and South Korea.

But equipment makers and supporters of the two dominant 3G wireless standards are still waiting for a final decision in China even as field tests show the local standard falling behind the performance of its European and U.S. rivals.

"I can't make a prediction right now (as to when China will launch the 3G services)," Perry LaForge, Chairman and Executive Director of the U.S.-based CDMA Development Group, said during a news briefing.

"If you look at the maturity of technologies, the time (for China to launch 3G licenses) is ripe now," LaForge said.

CDMA2000, or code-division multiple access, is the U.S. standard developed by Qualcomm Inc.(QCOM) for 3G which is competing against the European preferred Wideband CDMA, or WCDMA.

To complicate matters further, China is promoting its own standard, TD-SCDMA, or Time Division Synchronous-CDMA, jointly developed by state-owned Datang Mobile Communications Equipment Co. and Germany's Siemens AG (SI).

Laforge said China has many other considerations despite the maturity of the technology, such as where to position the TD-SCDMA standard as well as the availability of handsets.

CDMA2000, WCDMA Outperform China Standard

The results of field tests disclosed by the Ministry of Information Industry Monday showed WCDMA recorded the most outstanding results with most of the 17 types of mobile phone handsets used in the trial.

CDMA2000 also performed well in both system operation and terminal compatibility, but only four mobile phones were selected to trial the system.

TD-SCDMA has gone through part of the tests which showed improved functions and justified further development, the MII said.

But the MII, the regulator in charge of the approval process and the field testing, stressed that there are many issues at play in determining the licensing.

"We consider many factors such as technology, system equipment and terminals as well as business models and market demand," Lou Qinjian, vice minister of MII told a 3G industry forum held in Beijing.

China's MII officials previously said the 3G licenses are likely to be issued in mid-2005. But the latest field test result, which the government said will be taken as a reference for license issuance, seems to add uncertainty to the timetable.

Wang Huili, a consultant at Norson Telecom Consulting, said she believes the government is still on track to approve the 3G services in the middle or second half of 2005.

But there might be some delay to allow the homegrown standard to catch up with its global rivals, Wang said.

"The field trial indicates that another round of tests may be needed for TD-SCDMA as the technology is not mature yet," she told Dow Jones Newswires.

LaForge said the local standard is more likely to coexist with the U.S. and European-backed versions, adding that TD-SCDMA is to some extent complementary to both CDMA2000 and WCDMA.

As to how China's government may split the country's marketplace to the three standards, LaForge said: "We want at least one third of it."

-With Victoria Ruan, Dow Jones Newswires; 8610 6588-5848; djnews.beijing@dowjones.com

-Edited by Sharon Buan

(END) Dow Jones Newswires "

Posted to the site on 10th November 2004