antimatter
Banned Idiot
China Waves Red Flag Over Telecoms
Tina Wang, 01.07.09, 08:24 AM EST
Nationalism plays a part in China's move to support a homegrown 3G mobile technology, in addition to more widely accepted standards.
or the sake of having its own, Chinese-made third-generation mobile communications network, Beijing is willing to spend billions, despite reaping little apparent benefit from doing so.
2009 is the year when China will officially unleash a $41 billion, two-year program to upgrade the country's mobile communications infrastructure to third generation, bringing it in line with the rest of the advanced cellular world. But it is doing so by implementing three different 3G technologies.
As widely expected for several months, the Ministry of Industry and Information Technology officially divvied up 3G licenses among three telecom giants Wednesday. Industry leader China Mobile will be saddled with the less developed homegrown technology standard, TD-SCDMA. Smaller peers China Unicom (nyse: CHU - news - people ) and China Telecom (nyse: CHA - news - people ) will have an easier time implementing the W-CDMA and CDMA 2000 standards, respectively.
The world has increasingly moved toward W-CDMA, as U.S., European and Japanese carriers upgrade to the standard. China's own TD-SCDMA network may turn out to be more costly and complex to install and service. While W-CDMA is the preferred technology, China Mobile, which has nearly a three-quarters share of China's wireless market, has the strongest capabilities as an operator, said ABN Amro analyst Wendy Liu. The burden of China Mobile's TD-SCDMA license will cause it to lose its competitive edge, even though the move was long anticipated, she projected.
But why is Beijing pursuing a third standard that no one else in the world is prepared to adopt? "That is the complication. But, politically, they think that it is their homegrown standard, and they think that it is important to be able to achieve some sort of technological breakthrough," said one Hong Kong analyst who asked to remain unidentified. Chinese consumers will not benefit much since foreign handset makers are unlikely to include the Chinese standard.
The political choice means billions of dollars more in spending. "If you're operating in an economy that is not entirely market driven, then it doesn't really matter. If the government wants to do it and the government wants to pay for it, then no big deal," said the Hong Kong analyst. National security may also be a consideration, as Beijing will have a mobile technology network it solely controls. China will be the only country to have three 3G networks, according to Caijing magazine. The United States uses two 3G standards.
Tina Wang, 01.07.09, 08:24 AM EST
Nationalism plays a part in China's move to support a homegrown 3G mobile technology, in addition to more widely accepted standards.
or the sake of having its own, Chinese-made third-generation mobile communications network, Beijing is willing to spend billions, despite reaping little apparent benefit from doing so.
2009 is the year when China will officially unleash a $41 billion, two-year program to upgrade the country's mobile communications infrastructure to third generation, bringing it in line with the rest of the advanced cellular world. But it is doing so by implementing three different 3G technologies.
As widely expected for several months, the Ministry of Industry and Information Technology officially divvied up 3G licenses among three telecom giants Wednesday. Industry leader China Mobile will be saddled with the less developed homegrown technology standard, TD-SCDMA. Smaller peers China Unicom (nyse: CHU - news - people ) and China Telecom (nyse: CHA - news - people ) will have an easier time implementing the W-CDMA and CDMA 2000 standards, respectively.
The world has increasingly moved toward W-CDMA, as U.S., European and Japanese carriers upgrade to the standard. China's own TD-SCDMA network may turn out to be more costly and complex to install and service. While W-CDMA is the preferred technology, China Mobile, which has nearly a three-quarters share of China's wireless market, has the strongest capabilities as an operator, said ABN Amro analyst Wendy Liu. The burden of China Mobile's TD-SCDMA license will cause it to lose its competitive edge, even though the move was long anticipated, she projected.
But why is Beijing pursuing a third standard that no one else in the world is prepared to adopt? "That is the complication. But, politically, they think that it is their homegrown standard, and they think that it is important to be able to achieve some sort of technological breakthrough," said one Hong Kong analyst who asked to remain unidentified. Chinese consumers will not benefit much since foreign handset makers are unlikely to include the Chinese standard.
The political choice means billions of dollars more in spending. "If you're operating in an economy that is not entirely market driven, then it doesn't really matter. If the government wants to do it and the government wants to pay for it, then no big deal," said the Hong Kong analyst. National security may also be a consideration, as Beijing will have a mobile technology network it solely controls. China will be the only country to have three 3G networks, according to Caijing magazine. The United States uses two 3G standards.