By the end of this year, Chinese mobile communication population is expected to exceed 200 million to secure the number one place in telecommunication market. However, despite its astounding growth in volume, most Chinese mobile users have a simple purpose in using mobile telecommunication services: conversations. That is the reason the environment is premature for 3G services enabling super high-speed data communication.
Market researcher BIS Shrapnel recently published a in-depth report on Chinese 3G mobile telecommunication services market. In this report BIS analyzed current issues on 3G technology development and standardization in China. Followings are mainly discussed in the report.
Recently, the Chinese mobile telecommunication population reached 143 million to be the world's largest mobile telecommunication market, leaving the U.S. behind. The Chinese market is growing 70-80% every year. Currently the nation is struggling to meet the demands with its 2G GSM networks. This prompts China to seriously consider the time to introduce 3G in the market.
China is studying WCDMA (Wideband Code-Division Multiple Access) and cdma2000 for its 3G technology. The scope is narrowing on China-developed TD-SCDMA (Time Division Synchronous CDMA), however, China announced not to decide on the selection until the second half of 2002.
Although China is keeping silent on the time of service launching, the business world is focusing on the market for the reason that its launching of 3G mobile telecommunication services could prompt new service providers to accelerate market exploitations.
The oligopoly in the Chinese market by China Unicom and China Mobile is not ideal for the future Chinese market development. It seems that the new 3G service candidates could be China Telecom, the biggest telecommunication services provider in the market, China Netcom and the Chinese Ministry of Railways.
◇ Standards Issues
The Chinese government is weighing three technologies for its 3G mobile telecommunication standards: WCDMA lead by European and Japanese companies, cdma2000 lead by American companies, and TD-SCDMA being developed by Datang Telecom with unreserved supports from the Chinese government. Which technology will be chosen by China will show light and shadow on the Chinese telecommunication market, affecting telecommunication device manufactures on the world, as well as in China, too.
China's delay in choosing 3G standards can be explained as a strategy that the country is looking for a better position in negotiations. Three technologies mentioned above have different strong points. WCDMA is a technology developed one step higher from GSM which boasts of 100 million subscribers. The strongest point of WCDMA is that adopting this technology means the least cost to shift to 3G system.
Cdma2000, adopted by China Unicom, is based on the original CDMA technology of Qualcomm, which leads synchronous mobile telecommunication technologies. TD-SCDMA was developed by Chinese Datang Telecom and German Siemens AG. By summing all the circumstances up, it is possible to forecast that the Chinese government would give unreserved supports to TD-SCDMA while European WCDMA and American CDMA technologies are competing.
To add one thing to the circumstance, Chinese government's 'policy objects' to foster the national telecommunication industry increases the possibility of adopting TD-CDMA technology. Chinese telecommunication service providers such as China Mobile and Chinese government organizations including the Telecommunications Ordinance of the People's Republic of China, which is in charge of IT related policies, are friendly to China-developed TD-SCDMA and putting efforts toward its adoption for 3G standards.
China Mobile, the biggest mobile service provider in China, is clear to choose a better performance at a lower cost for 3G services China Mobile actively supported TD-SCDMA development and also is a member of TD-SCDMA forum. However, TD-SCDMA is a recently developed technology, compared to its competitors like WCDMA and cdma2000, and bears criticism as 'an immature technology' from Chinese experts. These complex and delicate circumstances may deter Chinese patriotism from giving a meaningful influence on 3G services standards. In the end, technologies with competitiveness will be the last winner in the Chinese market.
TD-SCDMA makes use of 3~5 times more wireless frequency compared to GSM. It is also known that TD-SCDMA's high compatibility to the existing networks and base stations has a cost-saving effect. Since TD-SCDMA is using an old radio wave technology, it shows a better performance in downloading to mobile phones than uploading in the opposite direction.
China has already invested millions in TD-SCDMA technology, and Siemens promised to invest another 100 million dollars. Compared to European WCDMA and Qualcomm's cdma2000, TD-SCDMA give service providers a comparably high cost-effectiveness. TD-SCDMA was publicly announced in Beijing in July 2001 to enforce the China's competitiveness in mobile telecommunication market.
China is allegedly completed the preparation for a large scale field test of TD-SCDMA at a speed of 384Kbps. TD-SCDMA field test will be carried out in the next second quarter, and is expected to need one more year to complete the development of commercially serviceable technology. Three Chinese mobile service providers (China Mobile, China Unicom and China Netcom) are all expected to participate in the test. These companies are regarded as strong candidates by the Chinese Telecom Research Institute, an affiliated organization of the Telecommunications Ordinance of the People's Republic of China.
This first TD-SCDMA type is a progression from conventional GSM, and the first commercial TD-SCDMA system will be officially put into operation from second quarter of 2002 after getting a final approval from the Telecommunications Ordinance of the People's Republic of China. Now, in the second phase, the focus will be on the development of related devices, and commercial products development will practically start from 2003 or 2004.
The field test would mobilize 40~50 Siemens NB430TS base stations and hundreds of mobile phones. In the future, thousands mobile phones will be tested in other cities across the country increasing the test size. In the test, this time, wireless internet access and positioning-based services will be took place, too. All mobile phones in the test are known to be co-developed by Siemens and Datang Telecom.
The Chinese government is addressing its people about the importance of TD-SCDMA technology as the first wireless telecommunication technology China is participating as a co-developer. For the development 300 odd Chinese experts are carrying out researches with Siemens and Datang Telecom. Other companies besides Siemens including RXT Telecom of Denmark, CATT and DBTel of Taiwan and Samsung of Korea are participating in the development.
To make TD-SCDMA a 3G standard, Datang Telecom, China Mobile and China Telecom established TD-SCDMA Forum in 2002 embracing more than 200 members including Nokia, Motorola, Alcatel, ZTE and Eastern Communication.
◇ 3G frequency Allocation
The Telecommunications Ordinance of the People's Republic of China has not decided on the issue of allocating frequency for IMT2000 yet. SRRC (State Regulatory Radio Commission) and Telecom Science and Technology Research Institute will be in charge of the issue. Since China is already assigned 1880∼1900㎒ and 1960∼1980㎒ band to WLL, SRRC has decided to allow the current WLL frequency to be used only until the year 2002 for the purpose of avoiding frequency conflicts with IMT200 frequency band (1885∼2025㎒ and 2110∼2200㎒ band) suggested by ITU.
◇ Chinese 3G Forecast
As a conclusion, China is likely to postpone 3G standards selection until 2004 when 3G telecommunication technologies start a full commercial service. Until 2003, it seems to keep testing the technologies.
Since most Chinese people tend to use mobile phones for a conversation, the penetration speed of 3G phones into the market should be slow. At first, the service will be used for receiving data.
During the first phase development (mobile data/internet) from 2000 to 2002, China Mobile is focusing on developing low-speed data technologies such as SMS. Then in the second phase, 3G service development and high-speed data through 2.5G GPRS will be the main object. In the third phase after 2004, high-speed data transmission for still images and video phone services will be the main issues. Accordingly, due to technology development and frequency allocation issues, China's 3G mobile service will be settled down as early as 2004~2005.