OYSTER BAY, N.Y.—A national Time Division Synchronous Code Division Multiple Access network will eventually be built in China, despite the concerns of Chinese operators about the technology, according to ABI Research. And although the last TD-SCDMA field trial was not successful, the commercial capability of TD-SCDMA has improved significantly, according to Junmei He, Asia analyst for ABI.
"We expect production of TD-SCDMA equipment to start in mid-2005, chipsets in 3Q 2005 and handsets in 4Q 2005," said He. "3G licenses should be issued in the third quarter of 2005."
ABI recently issued a new report, "TD-SCDMA: The Chinese 3G Standard," that analyzes the TD-SCDMA industry chain, from wireless operators and equipment vendors to handset and chipset vendors.
Compared to a standalone TD-SCDMA network, a mixed Wideband CDMA/TD-SCDMA network creates problems for operators in establishing efficient business models because the industry chain of mixed networks is not as developed as that for pure networks, said ABI.
ABI believes the China TD-SCDMA network will first be established in urban areas, while a Global System for Mobile Communications network will complement TD-SCDMA for nationwide coverage.
If they choose TD-SCDMA, China Telecom and China Netcom will enjoy strong policy support from the Chinese government, according to ABI. These favorable policies will be more important in attracting subscribers than service quality, as was the case with the personal handphone system.
The determination of the Chinese government to simplify telecom market competition increases the speculation of a market reconstruction achieved by splitting China Unicom, which carries both GSM and CDMA networks. Because the related parties are all listed companies, a split would be carried out in the capital markets. If that happens, China Telecom would probably purchase the GSM network and China Netcom would purchase the CDMA network. The 3G license would be delayed to 4Q 2005, given the time needed for reconstruction, said ABI.
Source: ABI Research.
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