The long-delayed rollout of China's self-developed 3G technology, TD-SCDMA, has been marred by negative news from hardware developers, network operators and early users.
One of the largest shareholders in a key TD-SCDMA chipmaker is quitting the TD-SCDMA market before the technology has even been formally launched.
Datang Mobile Communications said that it was selling its 32 per cent stake in local chip developer T3G Technology.
T3G Technology is among the five largest makers of TD-SCDMA chips, according to the China Daily.
Datang did not give a reason for its decision, which was posted in a statutory stock exchange filing. STMicroelectronics is rumoured to be a potential buyer.
T3G reported revenue of less than $170,000 as it lost over $14m in the first six months of this year, the China Daily said.
Chinese network operators have been ready to introduce 3G service for several years, but the government delayed issuing 3G licences while developers tried to fix persistent problems with the locally-developed TD-SCDMA.
China Mobile, the country's largest mobile network operator, began a staggered introduction of TD-SCDMA this April, with a strong promotional campaign and tens of thousands of users in major cities being offered subsidised phones.
Despite this, government ministers apparently believe that China Mobile is moving too slowly.
Officials are pressuring the company to speed up the TD-SCDMA rollout to ensure that the 3G service is working properly by the time the Olympic Games begin in early August, according to government-controlled news agency Xinhua.
Press and analysts reports suggest that some early TD-SCDMA users have complained of technical problems with the service, such as poor call quality or dropped connections.
In related news, the Chinese government has granted licences to 19 local and foreign manufacturers to sell TD-SCDMA handsets and TD-SCDMA data cards for PCs, among them Datang Mobile Communications.
The licensed foreign vendors are LG, Samsung, Motorola and Phillips, according to local media.
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