China steps up research on homegrown mobile standard
Not very good for Ericy. But certainly good for Siemens:
China steps up research on homegrown mobile standard
By Reuters
Special to CNET News.com
July 13, 2000, 5:45 a.m. PT
BEIJING--China today said it is stepping up research on a homegrown cellular phone standard that could pose a threat to foreign technologies backed by Nokia, Ericsson and Qualcomm.
The technology, called TD-SCDMA (time division synchronous code division multiple access), is being developed by government-funded Chinese researchers and Germany's Siemens.
• Get the "Big Picture"
• Related News
• Message Boards
Quote Snapshot
NOK 55.12 -1.25
ERICY 22.38 -0.94
QCOM 65.56 -4.25
MOT 37.50 -0.62
ALA 73.19 -3.25
CHU 25.44 -1.56
Enter symbol:
· Symbol Lookup
Quotes delayed 20+ minutes
The government has already poured tens of millions of dollars into the new standard, designed to replace current-generation mobile phone technology with advanced services such as high-speed Web access and video conferencing.
While such services appear to be at least two years away in China, the technical standard--or standards--that China eventually chooses could have a profound impact on the revenues of foreign mobile firms vying for a piece of the massive market.
Senior telecommunications official Zhou Baoxin told a news conference today that China is far from determining which next-generation standards it will adopt but that it is intensifying research on TD-SCDMA.
"As to which standard we will adopt--and whether we will adopt one standard or two standards--we are actively studying that right now," said Zhou, deputy director of telecommunications administration at China's Ministry of Information Industry.
"Of course, we're stepping up research on the TD-SCDMA standard (that) our country has proposed," he said.
Do you have an opinion or comment on this story? Tell us.
A threat to foreign firms
TD-SCDMA spells bad news for companies including Finland's Nokia, Sweden's Ericsson, Motorola of the United States, and Alcatel of France. Those companies have patents and manufacturing stakes in a rival standard: W-CDMA (wideband code division multiple access).
San Diego-based Qualcomm, on the other hand, stands to gain most from China adopting a third standard, called CDMA2000.
Zhou declined to comment on whether the Chinese government will have the final say on which standards are used or such decisions will be left to the market.
So far, the market has taken an unkind view of TD-SCDMA.
China's two mobile service providers, state giant China Mobile Communications and smaller player China United Telecommunications, have scoffed at the technology as unreliable, according to U.S. analysts who visited China in May.
China Mobile is the parent of China Telecom (Hong Kong). China United Telecommunications is the parent of China Unicom, which listed shares on the Hong Kong stock market last month in Asia's largest-ever initial public offering outside of Japan.
China Mobile has expressed interest in adopting the W-CDMA standard, since it is compatible with its current-generation GSM networks and would be cheaper to implement.
China Unicom has indicated it would experiment with Qualcomm's CDMA2000 technology.
Time remains for improvements
An investment banker in Hong Kong who follows the industry agreed that TD-SCDMA has technical flaws, but said there is time left to solve them.
"If you move at a fast speed--say, when driving a car--it loses its signal. So there are bugs that need to be worked out," said the banker, who declined to be named.
"On the other hand, Siemens backing this does give it some credibility," he added.
It is also possible that China will issue licenses to new mobile players that could end up using the homegrown standard.
Asked how long it would be before China decides on the standard, Zhou declined to comment.
Story Copyright © 2000 Reuters Limited. All rights reserved. |
