BEIJING-China’s telecom circles are hotly debating whether the country’s own standard for third-generation (3G) mobile communications-Time Division Synchronous Code Division Multiple Access (TD-SCDMA)-will be the goose with the golden eggs, allowing it to claw back precious terrain from foreign equipment suppliers.
Still, the Chinese are not on a solo quest for mobile-phone leadership, having teamed with Germany’s Siemens. Juergen Lagleder, Siemens China senior vice president, claimed TD-SCDMA is better suited to the Chinese market than rival standards cdma2000 and W-CDMA. But will it deliver?
In July, the number of Chinese mobile-phone subscribers passed the 60 million mark, overtaking Japan to become Asia’s largest wireless market and the world’s second-largest market, right behind the United States. By year’s end, the Ministry of Information Industry (MII) expects the number of Chinese users to surpass 70 million.
Still, foreign technology and suppliers dominate the market. AMPS, GSM and CDMA-first-and second-generation mobile communication technologies-are all foreign imports. On the horizon looms the cdma2000 and wideband CDMA 3G standards.
In the first six months of the year, 12.7 million handsets were sold in China. Domestic brands have so far only captured a paltry 3 percent of the local market. One of the main reasons for this lackluster performance is, according to Chinese industry insiders, the lack of a Chinese standard.
The Chinese government does not plan to sit idly by while this foreign domination of one of its most promising high-tech markets continues. It has poured funds and manpower into the development of its own 3G-standard, TD-SCDMA. Having intellectual property rights for the technology used in its telecom networks has become a powerful driving force, propelling its research and development efforts.
China announced it will invest US$168 million to develop domestic mobile-phone manufacturing.
A Herculean task
In June 1992, China’s State Planning Commission and the former Ministry of Posts and Telecommunications, now MII, entrusted the task of mastering Europe’s GSM standard to the First Research Institute of the Datang Group, now the China Academy of Telecommunication Technology (CATT). It took project leader and current chief engineer of the institute, Wan Guoguang, and his team four years to study in detail the English-language documentation, which could fill a small room.
At the end of 1997, Datang had developed the SCDMA wireless access system. When the company first considered developing its own 3G standard, it looked at its SCDMA technology as a basis on which to build. Headed by Vice Chief Engineer Li Shihe, a small group of researchers started work in May 1998. Siemens China joined their efforts.
On June 29, 1998, the last day the International Telecommunication Union (ITU) accepted proposals for 3G wireless transmission technology, China faxed its own proposal to the ITU’s Geneva headquarters. TD-SCDMA became one of 15 proposals received for consideration by the ITU.
At the end of October 1999, TD-SCDMA was accepted at the ITU TG8/1 Group’s meeting in Helsinki, Finland, and again confirmed by the ITU’s wireless conference in May 2000.
At a technical seminar on TD-SCDMA on 15 August, 2000, in Beijing, Vice Minister of Information Industry Lou Qinjian called on the country’s operators and telecom equipment manufacturers to continue to give their support to the TD-SCDMA standard. In the heavily populated districts of China’s major cities, frequencies are running out. The only solution to add even more subscribers is to move to 3G.
Eight domestic telecom suppliers have joined the 3G Expert Panel to co-develop 3G technologies and applications. Panel head You Xiaohu told the China Daily Business Weekly, “It’s a great breakthrough to hold our own 3G standard under which domestic manufacturers can develop telecom equipment with their own core technologies.”
Four advantages
Siemens China’s Lagleder explains the four main advantages of TD-SCDMA.
“First of all, it has a very high spectrum efficiency of three to five times that of GSM, compared to W-CDMA with a spectrum efficiency of only 1.7 times that of GSM,” Lagleder said. “Secondly, the migration path from GSM to TD-SCDMA is very cost effective. Costs are expected to be 25 percent less than those for W-CDMA and even 40 to 50 percent less than those for cdma2000.”
Yu Xiangguo, general manager 3G networks at Siemens China, adds: “How to protect its investment is an important issue for network operators. TD-SCDMA can coexist with the GSM core network and base stations. The evolution can go step-by-step without heavy additional investment.”
A TD-SCDMA base station can be added at frequency-critical spots and connected to the GSM base station controller (BSC) with 3G spectrum.
Lagleder continued: “Thirdly, TD-SCDMA is more compatible with the Internet Protocol (IP). Development of W-CDMA started much earlier, when IP compatibility was not so important, and it was therefore not designed with IP in mind. TD-SCDMA is especially suitable for data transmission. Finally, time to market is much shorter as the TDD spectrum will become available in China earlier.
“Following several trials, a decision to implement TD-SCDMA will be taken by the Ministry of Information Industry at the beginning of next year. We are confident the standard will at least be introduced in the Chinese market and also the Asia-Pacific market. I cannot rule out that it will even be accepted in Germany, but of course, Siemens is also working on
W-CDMA. Most of the development work for TD-SCDMA is done in our R&D center here in Beijing, where 150 developers are working on the infrastructure part of TD-SCDMA only. We will need another 50 to 70 for handset development.”
Siemens largely missed the boat on GSM worldwide, but the company has almost 25 percent of the infrastructure market in China, but less than 10 percent of the handset market. The company did not believe in second-generation CDMA, but is now committed to TD-SCDMA.
But as the Chinese-language Communications Weekly rightly remarked, the touchstone for TD-SCDMA will be the market.
