China to Test Third-Generation Cell Phone Standards in March
By Eugene Tang and Linus Chua
Hong Kong, Dec. 5 (Bloomberg) -- China will decide by March the technology its high-speed mobile phones will use in the next decade, setting the stage for manufacturers such as Nokia Oyj to pitch their wares to Asia's No. 1 telecommunications market.
The Ministry of Information Industry, which sets rules and awards phone licenses in China, will ask telecom equipment suppliers to test systems that will run so-called third generation cellular phones. These phones will be able to receive signals 200 times faster and access the Internet at least 40 times faster than phones available now.
Competing are three technologies, one of which will become the standard for a nation that already has 60 million cellular phone users, and is expected to become the world's largest phone market, surpassing the U.S., by 2008.
``All standards are under study,'' China's Minister of Information Industry Wu Jichuan said. The ministry did not say what performance benchmarks will be used.
Siemens AG's China unit will test its time-division synchronous code-division multiple-access, or TD-SCDMA, standard, which it is developing jointly with state-run operators especially for the China market. Its standard will be challenged by wideband- CDMA, and U.S.-based Qualcomm Inc's CDMA2000.
The ministry will ``make the official decision depending on the results of the first trial runs in the first quarter of next year,'' said Juergen Lagleder, Siemen's senior vice president.
Almost 98 percent of China's mobile phones currently run on the Global System of Mobile Communication, or GSM, standard. Only Great Wall Telecom, a unit of China Unicom Ltd., runs a cellular network using Qualcomm's CDMA standard. It serves about a million customers in four Chinese cities.
Standards
TD-SCDMA simultaneously sends and receives cellular phone signals, called time division duplexing, or TDD. That means it can squeeze about three times more voice and data signals into airwaves than other standards, Siemens officials said.
``TD-SCDMA is the ideal technology for migrating GSM cellular phones to third generation standards, especially for network operators who want to offer Internet and data services on a limited radio spectrum,'' said Yu Xiangguo, Siemens' 3G Network general manager in Beijing.
TD-SCDMA will also allow operators such as China Mobile Ltd. and China Unicom Ltd., the nation's No. 1 and No.2 phone companies, to offer Internet connections through their cellular phone systems, without having to make major changes to their equipment.
``The migration from GSM to TD-SCDMA is smooth, so the operators don't have to strip the entire network or install new base stations,'' Lagleder said.
The WCDMA and CDMA2000 technologies send and receive cellular phone signals using separate packets called ``uplinks'' and ``downlinks.'' The technique, called frequency division duplexing, is said to use more air space than the TDD technique.
China Unicom will be the sole operator to upgrade to CDMA2000, giving Qualcomm a foothold in China's phone market.
``Qualcomm is very encouraged to hear of the (tests). We will work closely with domestic Chinese phone companies to push for the adoption of CDMA2000 technology'' to upgrade Great Wall's CDMA standard, said Joe Zhang, general manager of Qualcomm CDMA Technologies China.
Qualcomm's shares rose 8.4 percent to $90 yesterday in the U.S. after the company said it won China's official backing for CDMA, on which China Unicom plans to base a nationwide network.
Qualcomm gets to collect royalty payments from the sale of CDMA equipment, because of the patent rights it holds.
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