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3G: A Question of Standards
To prevent potential bubbles and duplicate costs, the government is shaping its future based on the next generation of mobile telecommunications technology.
Since current mobile telecommunications technologies have been dominated by foreign companies, domestic firms are seeking a presence in the third-generation (3G) mobile telecom system.
In co-operation with German Siemens AG, China Telecom submitted its own TD-SCDMA (time division-synchronous multiple access) standard to the International Telecommunications Union in June, 1998.
The ITU accepted the proposal late last year, paving the way for China to further develop its own 3G standard.
However, the dominant standards worldwide are Europe-favored WCDMA (wide-band CDMA) and US-supported CDMA 2000.
"We take a prudent attitude to select the 3G standards which are tailored to China's own market situation," said Zhang Chunjiang, vice-minister with the Ministry of Information Industry (MII).
Telecom policy makers, despite their intentions of cultivating the country's own industry, can hardly ignore a smooth transition from the current second-generation system to the high-end 3G.
The domestic mobile telecom network is now dominated by the GSM system (global system of mobile communications), supported by European companies including Ericsson, Nokia and Siemens.
Experts say China is likely to adopt two main standards for its future 3G development, its own TD-SCDMA and Europe's WCDMA.
"The industry policy makers must seek a balance between cost reduction and favorites," said an expert with the Beijing University of Post and Telecommunications.
The hot pursuit of next-generation mobile technology is not limited to choosing a standard.
How to license 3G service operations, is another major item on the agenda of policy makers.
Information Industry Minister Wu Jichuan has ruled out a possible auction of 3G licences such as is done in Europe.
Wu said the government is trying to avoid unsustainable bubbles in the market.
The administration favours a rational distribution of 3G licences to domestic operators, he said.
Experts said the high prices 3G licences go for are eventually passed on to consumers.
A tide of 3G licence auctions is sweeping the world. A US$46.2 billion-worth German auction in August far outstripped two earlier auctions in Britain and the Netherlands.
Germany's haul surpasses the US$35.6 billion bonanza Britain reaped during its own auction last April. By comparison, the Dutch auction raised a mere US$2.5 billion from five licences.
However, it would be difficult for the MII to select 3G licence recipients.
The licences are expected to be granted to four telecom operators, including China Mobile, China Unicom, China Telecom and China Netcom.
"We are making preparations for the operation mode of 3G-based services," said Wang Jianzhou, executive vice-president of China Unicom.
Wang said the company is currently focused on upgrading its network to GPRS (general packet radio system), a so-called 2.5 generation technology.
The 3G mobile phone standard, known as the Universal Mobile Telecommunications System, has a transmission speed nearly 40 times the existing standard, allowing mobile phones to be used more like computers with the capacity to access the Internet and even display video.
After it hits the market in 2002, UMTS is expected to open the door for "m-commerce", in which microchips inside mobile phones allow them to be used like debit cards to pay for everything from monthly rent to taxi rides and vending machines.
Source: China Daily
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