WSJA(1/23) China Moves Step Closer To Launching 3G Service
(From THE WALL STREET JOURNAL ASIA) By Jason Dean
BEIJING -- China's government took another step toward a technological overhaul of its telecommunications industry, declaring a homegrown, third-generation wireless standard to be ready for commercial use.
The Ministry of Information Industry's formal approval Friday of the TD-SCDMA standard removes an important obstacle to the start of third-generation, or 3G, service in the world's biggest wireless market. Beijing's desire to give TD-SCDMA time to become commercially viable is widely seen as a key reason it has yet to issue 3G licenses to wireless operators.
So-called 3G service, which has been available for years in some countries, lets users send and receive data more quickly with their mobile phones, enabling video and high-speed Internet transmission and other fancy functions. Nortel Networks Corp., Telefon AB L.M. Ericsson, Motorola Inc., Lucent Technologies Inc., Huawei Technologies Co. and other big telecom-equipment makers have been eagerly anticipating China's decision to move forward with 3G, which is expected to yield billions of dollars in spending on network upgrades by the country's wireless carriers.
Industry executives have expressed increasing confidence in recent months that 3G licenses will be issued by the middle of this year -- perhaps as soon as March. Officials from the Ministry of Information Industry, which oversees the telecom sector, reinforced those hopes last month with statements suggesting preparations for licensing were almost completed.
TD-SCDMA is part of a broad effort by Beijing to create Chinese-made standards so the country can bolster domestic know-how and cut spending on imported technology. Foreign companies such as Siemens AG have helped the development of TD-SCDMA, but China's government and Chinese companies have taken the lead in promoting the technology. The other two internationally recognized technological standards for 3G service, WCDMA and CDMA2000, were developed overseas.
Friday's statement, published on the Ministry of Information Industry's Web site, makes TD-SCDMA the first of the 3G standards to be formally approved in China, Wang Lijian, the ministry's spokesman, said in a telephone interview. The other two are still being reviewed, he said.
In the statement, the ministry said that after extensive tests of TD-SCDMA in equipment, "all of its key technology has now been inspected and verified." Countering speculation that TD-SCDMA might, because of its immaturity, need to be used in combination with another technology, the statement said the Chinese standard "can be used to make an independent network."
The statement said the ministry's approval of TD-SCDMA would speed up the development of products using the technology. The announcement means that "TD-SCDMA is now ready for commercial use," Mr. Wang said.
Beijing still must sort out other issues before 3G licenses are issued, such as which companies will use which technologies. Industry analysts say the most likely scenario is that a TD-SCDMA license will be issued first, most likely to China Telecommunications Corp., the country's biggest fixed-line carrier and parent of Hong Kong- and New York-listed China Telecom Corp.
Licenses for other standards could come several months after the TD-SCDMA license, analysts say. Those licenses are likely to go to the two dominant wireless companies, China Mobile Communications Corp., parent of China Mobile (Hong Kong) Ltd., and China United Telecommunications Corp., parent of China Unicom Ltd.
---
Cui Rong in Beijing contributed to this article.
(END) Dow Jones Newswires
01-22-06 1631ET
Copyright (c) 2006 Dow Jones & Company, Inc.
AI
