MUNICH, Germany-Siemens AG said it expects to begin shipping TD-SCDMA equipment by the middle of this year, a move the company said shows that its strategy in China will pay off as carriers begin construction on third-generation networks in the world’s largest wireless market.
“We are pursuing a dual strategy in China,” stated Christoph Caselitz, head of Mobile Networks at Siemens Communications. “First, we have outstanding W-CDMA know-how and the sales successes to match. Second, we assumed a pioneering role for TD-SCDMA in China at the right time.”
Siemens noted that while 3G licenses have yet to be awarded by the Chinese government, the company has been working with Chinese partners since TD-SCDMA’s inception and has invested more than $202.8 million developing the technology. The company said it has been working with Huawei Technologies Co. Ltd. and the Chinese Ministry of Information and Industry to test TD-SCDMA products, including base stations and their control hardware. Siemens said handset vendors have been testing TD-SCDMA gadgets with its equipment since the middle of last year.
“We can deliver the infrastructure as soon as the Chinese government has awarded the licenses to carriers,” said Caselitz.
The company explained that TD-SCDMA’s distinguishing features are that it uses the 155 MHz frequency spectrum specified for China, it transmits large volumes of data and it covers large geographical areas.
In January, the Chinese government declared TD-SCDMA the country’s official third-generation technology. Developed by Datang Mobile and other Chinese equipment vendors, TD-SCDMA is expected to protect Chinese firms from royalty payments to the likes of Qualcomm Inc. and others. Qualcomm holds most of the essential patents to CDMA2000 1x EV-DO technology as well as patents covering W-CDMA. With more than 400 million wireless subscribers already, China’s market is expected to grow 65 percent by the end of 2010, according to Informa Telecoms & Media.
Industry analysts have said that China was stalling on issuing third-generation licenses so that TD-SCDMA could mature, but pressure has been building for China to make a move. The Chinese government has made no secret of its plans to wow the world with its 3G networks during the 2008 Beijing Olympics. Now that the government feels TD-SCDMA is ready for prime time, 3G licenses are expected to be awarded swiftly.
Pyramid Research says Chinese operators are poised to battle things out for market control as 3G is deployed.
“The winner of the Chinese 3G game will be the one who is best able to retain the high spender,” said a recent report by Pyramid Research. “TD-SCDMA, being an untested technology, will initially face constraints. Its 3G market share expected in 2006 at 10 percent should expand to nearly a quarter by 2010.”
