TDD - Time Division Duplex
FDD - Frequency Divide Duplex
In FDD, data upload and download are placed on two separate channels. This allows uploads and downloads to occur simultaneously and in parallel. Good, except it requires two frequencies. In TD, both upload and download is shared into a single frequency and access to that frequency is dynamically determined.
As more and more smartphones, MIDs (Mobile Internet Devices) and dongles come online, the FCC and other FCCs around the problem are facing with a growing problem sometimes called "spectrum Armageddon." In other words, there won't be enough spectrum band to accommodate the sheer number of projected wireless internet devices that may come online. This is not just smartphones and dongles, but also a category called MIDs or tablets, like the iPad where you got tablet sized computers that have built in 3G/4G telephony with internet.
So far, all our 3G technologies have been FDD. This includes W-CDMA also known as UMTS, and its 3.5G derivatives, HSPA, HSPA+ and HSDPA. This 3G is the successor of the GSM standard. There is also the CDMA-2000 also known as EV-DO, which is the 3G successor to CDMA, used by Verizon, Sprint, Bell (Canada), KDDI (Japan) and China Telecom.
China is the only country to have a TDD 3G standard, called TD-SCDMA. This is used only with China Mobile, and handsets made to this standard is not 3G compatible with the rest of the world. Why would China opt for this home grown standard? TDD as you can see relies on a single channel for data uploads and downloads. Already that puts you with half the frequency use of FDD, a big advantage in heavy population density areas.
Why is TDD more efficient in terms of internet access on high density areas? FDD makes the assumption that uploads and downloads of data is about equal. This makes sense if the user does a lot of talking. But as mobiles turn increasingly to use internet data, such as streaming music, TV and videos, usage becomes asymmetrical in heavy favor of the download. In typical internet usage, on PCs, download of data predominates over upload. Under an FDD scheme you are wasting a frequency band waiting for an upload. TDD removes under utilization and saves you one frequency channel. Use the main channel for downloads and upload when necessary.
Of course, using a dynamic time allocation means TDD is going to be more complex, which is why TD-SCDMA is so late. But as the technology keeps getting perfected, China Mobile is looking for its 4G next step--- which is TD-LTE. This turns TD-SCDMA base stations into 4G.
What got the rest of the world interested with TD-LTE is the solution to spectrum density using TDD. The main rival to LTE is WiMax which also uses a TDD solution, but carriers and much of the wireless telecom network builders like Ericsson and Nokia Siemens have already appointed LTE as the 4G standard.
While its far too late for the rest of the world to adopt TD-SCDMA, we are just beginning with 4G and TD-LTE has a good chance here.