This year will be an important one in which to step up the commercial and industrial development of TD-SCDMA (time division synchronous code division multiple access), the homegrown third generation (3G) mobile communication standard.

This is the biggest issue on the mind of Zhou Huang, president of the Datang Telecom Technology and Industry Group, the standard's developer, as it strives to make the standard grab a greater market share in future competition with the two other 3G standards -- the European-based WCDMA and the US-based CDMA2000 -- in the world's most populous market.

"This year, we will make enhanced efforts on the commercialization and industrialization of the standard," Zhou said in an interview with China Daily.

"The development of TD-SCDMA-related testing and equipment is currently proceeding very well," he said.

According to Zhou, the whole industrial chain for TD-SCDMA has already been well established.

There are, for example, eight companies currently involved in the development of chipsets, including Commit Inc and T3G Technology Co Ltd.

STMicroelectronics, Denmark's RTX Telecom and US-based National Semiconductor are developing relevant chips.

For base stations and base station controlling equipment, Datang has so far signed deals with China Putian, Zhongxing and Nortel Networks.

"We don't rule out the possibility of co-operation with new partners such as Alcatel," he said.

According to him, the company has two solutions to produce chips for the handsets supporting TD-SCDMA.

One solution is to improve current mobile phone chips to make them support the TD-SCDMA standard.

The other solution is to develop new chips supporting the TD-SCDMA system, something which will become a reality in July, he revealed.

But 3G remains far from mature in the global context. All the three standards have not been rolled out commercially on a large scale as they have no successful business operational models to make a profit from.

"3G commercialization is only likely to reach a really large scale in around one to one-and-a-half year's time," Zhou projected.

"That enables us to catch up, as the large scale commercial experimental network of TD-SCDMA is likely to be accomplished in the fourth quarter of this year."

He expected that the company will establish the commercial experimental networks in most areas of China in the latter part of this year.

As far as funding for the development of TD-SCDMA is concerned, Zhou said the most difficult time was in the past three years as a result of the depressed global telecoms market and the poor performance of 3G in Europe.

But Zhou added that these bad times had passed, adding that the company is planning to attract more foreign investment.

"We are now in talks with many companies and some are reaching the final stage," he said, but did not elaborate.

Being the homegrown standard, TD-SCDMA has gained increasing attention within the industry.

During the second phase of 3G testing which is currently underway, all the six domestic telecom operators all adopted TD-SCDMA.

"Government support has reflected the great market potential for the TD-SCDMA, which will serve as a demonstration for foreign investors," Zhou said.

At a TD-SCDMA Forum held in August in Beijing, officials from the Ministry of Information Industry, the National Development and Reform Commission and Ministry of Technology all expressed their support for the standard by offering funding and preferential policies.

Zhou denied claims that the comparatively late issuing of 3G licenses is because the Chinese Government is waiting for the maturing of TD-SCDMA.

"It is because the telecom operator is not ready to find a model to earn profits from 3G so far, delaying their commercial take-off," he said.

Zhou believed Datang Telecom will benefit a great deal from the further opening of China's telecom market as more telecom equipment makers are likely to get involved in the manufacturing of 3G mobile phones.

"Personally, I think it is most appropriate to issue 3G licences in the first half of 2005," Zhou said.

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