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Chinese Wireless Standard Seeks a Market

TD-SCDMA is expected to be the dominant 3G technology in China, due to the heavyweight Chinese government support it receives. However there are no indications that 3G licenses will be issued anytime soon, and according to ABI Research analyst Hwai Lin Khor, "TD-SCDMA is likely to face an uphill battle outside of Mainland China, even in Hong Kong."

China's TD-SCDMA ecosystem is ready. Both Chinese and international industry players are already showing off their multimode handsets with TD-SCDMA/GSM/GPRS/EDGE interfaces. The deployed network infrastructure is already upgraded to an HSDPA-enhanced version.

TD-SCDMA's intellectual property rights holder, Datang Mobile, is already working towards an evolution of TD-SCDMA that will eventually incorporate LTE. The evidence suggests that the current 3G delay is due to regulatory complications rather than technical ones.

ABI Research believes that the restructuring of the telecommunications industry will continue through Q1 2008. The first TD-SCDMA license will be issued at the end of the quarter. Initial TD-SCDMA services will be provided in the ten cities where China Mobile, China Telecom and China Netcom have deployed trial networks.

The rest of the 3G licenses will be released six to nine months after TD-SCDMA. Hwai Lin Khor notes, "If the price points of handsets and services are attractive, TD-SCDMA may not need to fear WCDMA in the domestic market."

China's influence on Hong Kong's telecommunications industry is becoming more significant. This is apparent through the recent 850MHz band spectrum auction for CDMA2000 services, to ensure continuity of roaming services for China's visitors using CDMA handsets.

"It is no surprise that TD-SCDMA will eventually make its move into the island once the Chinese government has finalized its 3G outcome," says Hwai Lin Khor.

In fact, 5MHz of TDD spectrum was already allocated to the UMTS licensees when the license was issued. However, the success of TD-SCDMA in a mature market such as Hong Kong's is heavily dependent on market forces. It will face tough competition outside Mainland China.

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