China to kick off 3G field tests again
By Zi Mu (China Business Weekly)
Updated: 2004-03-01 16:30

Chinese authorities in March will kick off a second round of field tests involving 3G mobile communications systems, which should help them decide when and how to award operators with 3G licences.

However, a shortage of 3G (third-generation) cellphones and the sluggish development of a Chinese home-grown 3G standard is casting uncertainties on the allocation of the 3G licences.

There are three competing 3G standards: Europe-initiated WCDMA, US-backed CDMA 2000 and China's TD-SCDMA.

The Ministry of Information Industry (MII) will start field tests of WCDMA systems at the end of March, said Wang Zhiqin, deputy director of the Institute of Communication Standards Research at MII's China Academy of Telecommunication Research.

A visitor to a telecoms show in Beijing uses a giant CDMA1X cellphone model displayed by China Unicom.Chinese authorities in March will launch a new round of field tests of 3G (third-generation) wireless communications systems, which should help them decide when and how 3G licences will be allocated. [newsphoto]

Trials on CDMA 2000 will begin in April, followed by TD-SCDMA tests in May, she said.

Wang, a key figure involved in the trials, said the inadequacy of 3G phones remains the biggest bottleneck in 3G's development.

Twelve WCDMA cellphone models will be tested, including those produced by China's Huawei and Hisense, Wang told China Business Weekly.

There are no commercial CDMA 2000 phones yet. Manufacturers specially tailored some phones for the trials.

TD-SCDMA cellphones will not be ready for testing until the middle of this year, Wang said.

Manufacturers have yet to produce a TD-SCDMA phone for the tests, as the development of the Chinese standard lags far behind its rivals.

It also lacks wide industry support.

Chongqing Institute of Posts and Telecommunications, in southwestern China, announced in November it had developed a phone for TD-SCDMA. The phone was reportedly the first of its kind in the world.

Institute officials said TD-SCDMA phones will be produced in small scale this year, and in large scale next year.

But industry insiders said the phones are still far from the "real" TD-SCDMA phones.

A subsidiary devoted to the mobile phone business of Legend Group, China's largest PC maker, said last week it had inked a deal with China's Datang, a major developer of the TD-SCDMA technology, to produce TD-SCDMA phones.

It's unknown when Legend's TD-SCDMA phones will be available in the market.

A shortage of 3G phones has resulted in repeated delays in the global roll-out of 3G services.

Arun Sarin, chief executive officer of Vodafone, Europe's largest GSM mobile phone network, said last week product-quality deficiencies will delay the mass roll-out of new 3G handsets throughout much of this year.

Dependable, affordable 3G handsets will not be available in big numbers until the year's fourth quarter, Sarin said.

Rene Obermann, chairman of T-Mobile International, agrees with that assessment.

Wang said it is not unusual for the 3G handset R&D (research and development) to lag about a year behind the networks and systems.

But a shortage of 3G phones makes technical trials difficult, she said.

The 3G trials are scheduled to be completed by September.

"After September, we will probably not test WCDMA and CDMA 2000 any more," Wang said.

"But TD-SCDMA might have a chance to continue being tested, due to the government's support."

Industry observers have said TD-SCDMA will definitely find a niche in China's future 3G market, and that the government will not allocate the 3G licences until it makes sure the home-grown standard is viable.

"Several key breakthroughs must be made in the TD-SCDMA technology," Wang noted.

Compared with WCDMA, which has been already put into use in some European countries, TD-SCDMA is an unproven technology. It has never been used to form a stand-alone network.

How and when the Chinese Government issues 3G licenses will help determine which equipment makers snatch billions of dollars in contracts from the 3G network deployments, analysts said.

The 3G technical trials are crucial to the allocation of 3G licences, they said.

Industry insiders expected the issuance to occur before the end of last year, but it fell short of most people's expectations.

Now, most observers believe it will not take place before the completion of the 3G trials, most likely in the first half of next year.

Wang said many uncertainties remain.

"I assume it's very unlikely that the government will award operators with 3G licences before September. But it's still hard to predict, as there might be unexpectations," she said.

Rumours surfaced last week that China Netcom, the smaller fixed-line carrier, might gain the 3G licences before year's end -- ahead of other telephone operators.

Netcom Vice-President Zhang Changsheng said at a recent MII internal policy briefing that Netcom will "actively" participate in the 3G trials to make full preparation for operations of 3G services.

"China Network Communications Group Corp, since its launch, has been eager to offer all the telephone services to customers," he said.

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