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China's Evolving 3G Standard Still Immature

TD-SCDMA represents a significant opportunity for China to establish a global communication standard, to lead the development of the technology, and to own more intellectual property rights, which in turn will lower royalty fees and manufacturing costs, according to In-Stat.

However, homegrown TD-SCDMA standard has made China's road into 3G complex and tortuous, mainly due to the Chinese government's concerns about Intellectual Property Rights (IPRs), the high-tech market research firm says.

"The awarding of 3G licenses has been delayed due to the technological immaturity of TD-SCDMA," says Kevin Li, In-Stat analyst. "In-Stat regards the current round of testing as the pre-commercial application that embodies the Chinese government's preference for promoting TD-SCDMA's development ahead of WCDMA or CDMA2000."

Recent research by In-Stat found the following:

- TD-SCDMA subscribers will experience fast growth after 2008, and will approach 52 million in China by 2011, assuming that China Mobile obtains a TD-SCDMA license.

- In the TD-SCDMA value chain, handset development still lags behind that of equipment systems. The main problems stem from issues related to power consumption and dual-mode seamless switching.

- Data service and other VAS will be the key content to be tested in 2007.

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