China prepares to launch TD-SCDMA standard

China's home grown TD-SCDMA 3G standard is finally on the way to the market and could have 52 million users by 2011, analysts predict.

After years of technological stagnation, during which only 2G phones have been available, China's mobile telecoms industry is slowly moving towards a nationwide 3G roll out.

"The awarding of 3G licences has been delayed due to the technological immaturity of TD-SCDMA," said Kevin Li, a regional telecoms analyst with In-Stat. 

With major bugs in the TD-SCDMA standard apparently fixed, the government has told mobile carriers to go ahead with widespread TD-SCDMA tests.

Implementation of competing foreign 3G standards has been on hold for more than a year, and no 3G network has yet been opened to public access despite tests that started two years ago.

"In-Stat regards the current round of testing as the pre-commercial application that embodies the Chinese government's preference for promoting TD-SCDMA's development ahead of WCDMA or CDMA2000," said Lee.

The TD-SCDMA Forum, which represents companies manufacturing and using TD-SCDMA equipment, predicts that local telecoms operators will ship between two and three million TD-SCDMA phones before the end of this year. 

However, handset makers are still having problems with power consumption and seamless handovers between GSM and TD-SCDMA modes, according to analysts.

In-Stat forecasts TD-SCDMA phone sales to rise rapidly after 2008, approaching 52 million by 2011 if China's largest carrier, China Mobile, is granted a TD-SCDMA licence by the government, as is widely expected. 

Indicating the near certainty of its soon receiving a TD-SCDMA licence, China Mobile signed a new $311m deal earlier this week with local manufacturer ZTE for more TD-SCDMA backend infrastructure equipment, such as base stations.