Qualcomm Inc (QCOM)

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More Roadbumps for TD-SCDMA
By Carlo Longino, Mon Nov 08 21:15:00 GMT 2004

http://www.thefeature.com/article?articleid=101216

Just as it looks like the interest of foreign manufacturers was giving the Chinese 3G standard some momentum, slow development of TD-SCDMA handsets could slow things down.

Western vendors have begun to take TD-SCDMA seriously, increasing expectations that the standard will play more than just a bit part in the world of 3G, not the least of which in China, where it was expected to be deployed alongside the two other established global 3G standards. But as Chinese officials announced the results of the long-running field trials of all three, the lack of available TD-SCDMA handsets -- and their relatively poor performance -- may mean the government will not force any of the carriers interested in 3G licenses to build a network using the homegrown standard.

It had been anticipated that the Chinese Ministry of Information Industry would mandate at least one company build an all-TD-SCDMA network, but speculation now has the MII allowing three carriers to build their networks with either WCDMA or CDMA2000 for now, while agreeing to add TD-SCDMA when it's more mature.

While this may call into question the immediate importance of TD-SCDMA for equipment manufacturers, it's likely to mean that foreign vendors will still win most of the country's 3G upgrade spending, but also that those foreign companies' participation in the Chinese standard's development could increase. TD-SCDMA could prove an attractive choice for carriers in other developing markets where its royalty-free status can help them on their way to profitability. Vendors won't want to miss out on any potential spending -- in China, or elsewhere.

Reducing China's dependence on foreign intellectual property remains a growing aim of the government in the mobile industry. The MII last week joined a number of domestic technology companies to form the Mobile Multimedia Technology Alliance, a group intended to foster domestic cooperation and growth in technological innovation and IP for mobile applications.