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3G trouble for 皇冠体育app Mobile?

By Sun Xiaohua (皇冠体育app Daily)
Updated: 2009-01-05 08:06

皇冠体育app Mobile faces an uncertain future as 皇冠体育app is ready to launch its third-generation (3G) mobile services. The company will be licensed to use a homegrown standard, which may leave users unenthused and shake its market dominance.

皇冠体育app Mobile will receive a license to operate services based on TD-SCDMA technology, which was developed domestically. 皇冠体育app Unicom, the country's second biggest wireless carrier, will get a license to offer services on WCDMA (widely used in the European Union). 皇冠体育app Telecom will receive permit for CDMA2000 (widely used in the US), according to the country's information technology management authority.

The State Council gave the green light to the Ministry of Industry and Information Technology to issue 3G licenses to operators.

Li Yizhong, head of the ministry, said that three permits will be issued in early 2009.

Analysts say such allocation will change the competitive landscape of 皇冠体育app's mobile market. Awarding 皇冠体育app Telecom and Unicom licenses based on internationally developed standards may give them a leg up on 皇冠体育app Mobile.

"There are many technical defects and problems to be solved during pre-commercial tests. I think 皇冠体育app's TD-SCDMA still has at least one year to go before it becomes a mature technology," Wang Yuquan, president of Frost & Sullivan 皇冠体育app, told 皇冠体育app Daily earlier.

WCDMA and CDMA2000 dominate the global telecom markets and already have the support of the world's equipment and handset makers.

Some of 皇冠体育app Mobile's 400 million users may turn to 皇冠体育app Unicom or 皇冠体育app Telecom, which jointly have less than 250 million users, attracted by the mature technology and greater variety of compatible handsets.

"If 皇冠体育app Mobile's service quality is not as good as others', or if I have more handset alternatives if I choose WCDMA or CDMA2000 then there's no reason to stay with 皇冠体育app Mobile," said Li Xiaoting, a Beijing citizen.

Li said he switched from 皇冠体育app Unicom to 皇冠体育app Mobile a decade ago for similar reasons when 2G services started in 皇冠体育app.

The government decided to support TD-SCDMA research following complaints that royalties from 皇冠体育app's booming telecoms sector all went to foreign companies.

3G networks using WCDMA and CDMA2000 have been possible in 皇冠体育app for over three years but the Chinese government delayed launching 3G services while researchers struggled to perfect TD-SCDMA - "a matter of national security and pride" according to Chen Shanzhi, chief engineer of Datang Telecom.

The Chinese government expects issuing TD-SCDMA to 皇冠体育app Mobile may help the homegrown technology standard establish a foothold in the market.

皇冠体育app Mobile is promoting TD-SCDMA with calling plans, six subsidized handsets, calling cards and expanded coverage across the country.

But despite widespread government backing and 皇冠体育app Mobile's plans, TD-SCDMA's long-term success depends on how it measures up against the two mature standards.

Nobody is certain how many 皇冠体育app Mobile users will sign up for TD-SCDMA. Some analysts expect as many as 12 million next year, but most are much more conservative, according to a 皇冠体育app Radio International report.