Xiaolingtong Special Report Part Four: PHS faces challenge from China's homegrown SCDMA
Shanghai. (Interfax-China) - China's booming Xiaolingtong market will help the outdated PHS (personal handy phone system) technology make great strides in China, but now its dominant position is under threat from SCDMA (Synchronous Code Division Multiple Access), China's homegrown Xiaolingtong technology.
An Interfax source close to Beijing Xin Wei Telecom Technology Co., the sole supplier of the SCDMA system in China and a subsidiary under Datang Group, disclosed that Xin Wei has signed an intentional agreement worth RMB 4 bln (USD 480 mln) with the southern provincial subsidiaries of China Netcom, the second largest fixed-line telecom carrier in China, to offer SCDMA systems as well as SCDMA terminals. In addition, Shanghai Railcom, a provincial subsidiary of China Railcom, has also ordered 300,000 lines of SCDMA systems from Xin Wei for the Shanghai market.
China Netcom has started internal subscription of SCDMA-based Xiaolingtong service in three cities of Southwestern China's Guangxi with an initial subscriber base of 4,000-5,000. In addition, it has built experimental SCDMA network in Baoji, in western China's Shaanxi Province. SCDMA networks in other provinces will also be put in operation by the end of this year. In Daqing, northeast China's Liaoning Province, the telecom department of the Daqing oil filed has also set up a SCDMA network. China Telecom, although it claims not to develop Xiaolingtong service in northern China, still started SCDMA tests in Heilongjiang Province.
So far, SCDMA-based Xiaolingtong users in China have reached 130,000, most belonging to the internal networks of Daqing Oilfield, Shengli Oilfield and China's No.2 Automobile Group. Xin Wei expects that the total users of SCDMA-based Xiaolingtong users will reach 1.5 mln by the end of this year, and will break 3 mln benchmark by next year. The company now is worrying about inefficient supply of systems and terminals in near future, although its production base in Chongqing has an annual capacity of 6 mln SCDMA terminals and 1,500 base stations a year. Xin Wei now produces and sells about 200 SCDMA base stations a month, already beyond its full production capacity.
Chen Wei, general manager of Xin Wei, disclosed that his company currently is in talks with China's two largest telecom equipment vendors, Huawei Technologies and ZTE Corp., on joint production of SCDMA systems, and is likely to set up joint ventures with them. In addition, Xin Wei will provide SCDMA chips to TCL, the latter will be responsible for R&D of SCDMA-based Xiaolingtong handsets.
The Japanese-developed PHS technology and China's homegrown SCDMA technology can both be applied for the wireless local loop service, or Xiaolingtong. But an outstanding disadvantage of the PHS-based Xiaolingtong service is that its base station has a very limited coverage scope of less than 100m, which means more base stations should be built in a bid to realize wider coverage. In Beijing, for example, the operator, if it wants to realize full coverage of Xiaolingtong services in the city, must build approximately 1,000,000 base stations. This disadvantage, on the first hand, brings heavier network construction costs to the operator along with the not-so-satisfactory voice quality and a comparatively high drop rate, and on the other hand, makes the PHS based Xiaolingtong unsuitable for the development in China's vast countryside regions, where one village might be miles away from the other.
interfax.com
Xiaolingtong Special Report Part Five: A controversial future in China
Shanghai. (Interfax-China) - Industry experts and Xiaolingtong-related company officials have failed to draw up a clear future for Xiaolingtong to attendees of the Xiaolingtong Forum held in Beijing on August 16th. Whilst Xiaolingtong systems and terminal vendors, as well as Xiaolingtong value-added service providers, were trying their best to show how the formation of a perfect industrial chain could bring the popularity of Xiaolingtong to a new height, many industry experts indirectly expressed their worries and cautious outlook towards the future of Xiaolingtong.
A clear symptom for the likely slowdown of Xiaolingtong in China is that the contract value of PHS systems has experienced a sharp decline since the second quarter of this year. Although UTStarcom, the largest Xiaolingtong equipment and terminal vendor in China, announced contracts worth a total USD 432.5 mln in the first quarter of this year, figures for the second quarter dived sharply to only USD 224.8 mln. So far in the third quarter, UTStarcom has only announced contracts worth USD 70 mln.
As operators have extended the service to most potential regions, future investments in Xiaolingtong network facilities are shrinking. Additionally in some places, Xiaolingtong services are approaching a saturation level, indicating that new investment in Xiaolingtong network capacity expansion will be limited. Moreover, not all regions have shown satisfactory market response to Xiaolingtong (Shanghai Telecom has secured only several thousand Xiaolingtong users since it launched service in the city's suburban regions early this year), while complaints about bad voice quality, high drop rates and inability of in-room coverage are rising.
interfax.com |
