Blog Post

China throws foreign 3G a bone

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

China announced specifications for two major global 3G standards – W-CDMA and CDMA 2000 – indicating that it was fine with foreign equipment makers selling gear to Chinese mobile operators. It would be nice, except this grand (if meaningless) gesture seems like a diversionary tactic.

For instance, the specifications for the home grown 3G standard, TD-SCDMA, were issued in January 2006. Secondly, the specifications don’t necessarily mean licenses, which are yet to be issued. In other words, this is a hollow, meaningless exercise, which doesn’t hide the fact that Chinese government, does indeed prefer home grown telecom equipment makers – Huawei and ZTE Corp.

Read the story in The Wall Street Journal (subscription required.)

3 Responses to “China throws foreign 3G a bone”

  1. Yes it is quite a good strategic move. Interestingly enough at the same time Chinese People’s Daily report:

    Some industry observers say this is as a sign Unicom might sell its CDMA networks to fixed-line carrier China Telecom and focus solely on GSM services. China Telecom Chairman Wang Xiaochu has publicly expressed interest in buying one of Unicom’s two cellular networks. Unicom denies it is in talks to sell to the operator.
    Rumors suggest Unicom will scale down or cease investment in CDMA networks this year. Li denied the reports, saying Unicom will continue its investment, but would not elaborate.

    Hmmm. CDMA is political and so is China Telecom. Very political.

  2. Abhijit

    Its but natural for Chinese Govt to back Chinese companies. IMO, the move is more prompted by non-readiness of TD-SCDMA and realization that unless 3G is rolled out soon, govt will miss the bus for Beijing Olympics – which is seen as major revenue source by all mobile companies in China. So this is indeed a reluctant go-ahead. I wouldn’t be surprised to see curbs on WCDMA / CDMA-2000 (by way of lower spectrum allocations) once TD-SCDMA is mature enough.

    All in all, you must admit that its a good strategic move by Chinese govt.

  3. Jesse Kopelman

    China can prefer its own companies and still support 3GPP/3GPP2. Companies like Huawei and ZTE are emerging as major vendors for those foreign standards (and probably WiMAX too). These companies realize that TD-SCDMA will never get used outside of China — especially with the Nokia joint venture reducing Siemens incentive to champion it. Do they really want the trouble of having to make one product line for China and one for the rest of the world? Meanwhile, I’m sure the Chinese service providers would rather have access to the more mature 3GPP/3GPP2 product lines than go through the pain of beta testing TD-SCDMA. Perhaps this move by China has more to do with placating its own industries than outsiders?