Despite this, some say the homegrown standard may yet be sidelined by well-established global platforms.
Recently, the China-developed TD-SCDMA (time division-synchronous CDMA) and IP over SDH (internet protocol over synchronous digital hierarchy) received approval from the International Telecommunication Union (ITU) as a 3G standard.
The homegrown standards come from domestic telecoms research which has spawned over a hundred patents, reported China news Web site, china.org.cn. The sector has made rapid progress absorbing foreign technology, and those who support the Chinese standard will make large profits, claimed China's vice minister of information industry Lou Qinjian in the report.
Lou said that the ministry will continue to provide support for domestic telcom innovation. About US$73 million will be invested in TD-SCDMA research.
China's researchers are on a campaign to create its own standards for everything from computer operating systems to audio-video compression to 3G (third generation) data standards because of the license fees drained away to foreign institutions. The hope is that by exporting its standards, the flow of fees will be reversed.
Current standards such as CDMA (code division multiple access) belongs to U.S.-based chipmaker Qualcomm, while GSM (Global System for Mobile Communications) is owned by a foreign consortium.
Currently the largest single cellular market in the world, China has over 221 million mobile users and four million new subscribers are added each month. Analysts also expect the country to eventually become the largest user of wireless data services. The Chinese government is planning to issue 3G licences in the second half of 2004.
Officials hope the huge mass of consumers will spur to foreign firms to adopt Chinese standards for the China market. By pricing licenses more cheaply than its rivals, the policymakers hope to see products with Chinea-developed technology become popular outside the country.
Foreign supporters include German electronics kingpin Siemens, which said it joined with China telcom equipment firm Huawei to develop, manufacture and market phones based on TD-SCDMA.
However, an executive from the country's leading cellular operator expressed doubts about China's 3G standard being able to compete in cost or effectiveness against WCDMA.
TD-SCDMA loses connection in moving cars and cell-to-cell handover is still uneven.
In a report in the Asian Wall Street Journal, Jacky Yung, assistant chief financial officer of China Mobile said that TD-SCDMA might be a complement to the globally-adopted WCDMA standard, but would not be able to replace it in China.
According to analysts Norson Telecom Consulting, three out of China's four mobile and fixed line operators will focus on building WCDMA networks, using TD-SCDMA as a supplementary protocol. The remaining carrier is opting for the rival CDMA2000 technology.
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As the article points out, the new standard is about licence fees and also about boosting national pride by setting a new standard in addition to the extisting ones which originated from the U.S., Europe and Japan. I assume that the Chinese government will push the standard to be implemented in China. Whether that benefits the foreign enterprises who engage in research in TD-SCDMA, remains to be seen. The Chinese government surely does not push the standard so that foreign manufacturers can occupy the market. Instead of that, they want to see home-grown manufacturers like Huawei to be future suppliers of infrastructure and mobile phones. That leaves the foreign manufacturers with the necessity to "export" the standard to other continents in order to recapture their investments in China, and consequently, outside China Nokia, Ericsson, Motorola and Siemens will want to see the standard implemented once they see that there is little business left for them inside China. This will then benefit China which will level up on the field of IPRs and licenses. The Chinese government is doing a clever move in that game.
Posted by Gabriel Rüeck on Saturday, September 13 2003 08:20 AM