Nikkei Electronics Asia -- August 2007
Tech Analysis - 2
TD-SCDMA: More Standards to Come

TD-SCDMA, China's own 3G standard, is to be implemented at the end of 2007, marking an important step forward in China's "original standards" strategy.

Time division synchronous code division multiple access (TD-SCDMA) third-generation (3G) mobile phone service is expected to launch at the end of 2007 (Fig 1), marking the start of 3G service in the world's largest mobile phone market: 460 million subscribers. The Chinese government was determined to wait for the completion of TD-SCDMA technology, even going as far as to delay launch of other 3G standard-based services such as wideband CDMA (W-CDMA) and CDMA2000. And now that TD-SCDMA has become possible, it looks like bids will be accepted for facilities based on W-CDMA, CDMA2000 and other 3G standards as well.

Putting homegrown standards like TD-SCDMA into practical use is a dream come true for the Chinese government, which has adopted a policy slogan calling for "indigenous innovation". When Chinese industry develops products, services and the like in compliance with international standards, foreign corporations rake in the licensing fees. The Chinese government doesn't like this and is pushing the development of its own standards through both financial aid and policy. The program is paying off, too, as China is becoming increasingly active in formulating and adopting its own standards in many fields. None has become a real hit, however, and it is possible that TD-SCDMA may emerge as the first star to take the international stage.
For the Chinese government, TD-SCDMA is only the first attempt, and even if it fails to take hold in the global market other projects are in the works. There is little question that the Chinese government will continue to push strongly for its own standardization efforts.

Widespread Adoption
The TD-SCDMA standard is the closest of all the Chinese standards to achieving widespread adoption. It is almost certain that service will begin at the end of 2007, and when one considers the capital investment by carriers, the full support of the Chinese government and other factors, it stands an excellent chance of taking at least a portion of the China market.

TD-SCDMA has been delayed again and again since 2003, in spite of persistent rumors that, "This is the year service will start!" In fact, when one probes whether or not service will really start in 2007, Yusheng Xiao, China business manager, Financial Technology & Business Development Dept at Nomura Research Institute, Ltd (NRI) of Japan warned, "Nobody can say so with complete confidence." Even so, there are two reasons why most people in the industry think it will happen at the end of 2007.

The first is that China Mobile Ltd of China began accepting bids on a major TD-SCDMA facility contract in March 2007. ZTE Corp of China and other companies were awarded contracts in the first round in April 2007. According to reportage in China, China Mobile will invest Yen300 billion (approximately US$2.45 billion) into TD-SCDMA.

The general opinion seems to be that the Chinese government selected China Mobile as a TD-SCDMA carrier because it was the soundest of all the mobile phone carriers, financially speaking, and could afford a massive capital investment into the new technology. As of May 2005, the market value of the firm was Yen21,400 billion, putting it almost exactly even with Vodafone Group plc of the UK, a global mobile phone operator.

The second reason is that TD-SCDMA technology is quite mature, mostly due to the efforts of Chinese industry, and the supply stance for items such as chipsets and handsets is getting into shape. In November 2006 IC design technology start-up Comlent Technology Inc of China began sample-shipping a radio frequency (RF) transceiver IC and a baseband IC. The company was the first Chinese corporation to present a paper at the International Solid-State Circuits Conference (ISSCC), making an international splash.

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