TD-SCDMA WORKS.
That’s the view of one analyst who participated in trials in Baoding, China, as long ago as December 2006.
A very modest supply of subsidized handsets and data cards by domestic and foreign vendors should hit the market this summer for early adopters, according to ABI Research.
China Mobile – the winner of China’s TD-SCDMA 3G licenses, announced last week – will offer promotional service rates to drive interest by young subscribers, ABI said.
Despite a relative lack of handsets that could have created an Olympic showcase for the homegrown Chinese air interface later this summer, there’s little doubt the Chinese will make controlled demonstrations of its trial networks available to foreign visitors, one analyst said.
Mike Thelander, principal at Signals Research L.L.C., said that, even a year-and-a-half ago when he participated in a trial in Baoding, southwest of Beijing, TD-SCDMA performed better than European UMTS technology did in its infancy.
“Anyone who suggests that it doesn’t work is probably wrong, I’d argue,” Thelander said. “In December 2006, I was satisfied with its performance, though I had low expectations. And they’ve had a year-and-a-half to work out the kinks. But it definitely lags behind CDMA2000 1x EV-DO and HSDPA.”
“TD-SCDMA can’t be declared a success until it holds its own against the EV-DO and HSDPA networks being built in China,” Thelander added.
Clock ticking
Analyst Will Strauss at Forward Concepts agreed that, with less than 90 days until the Olympic Games begin in Beijing and other Chinese cities, simple logistics will preclude a widespread, showcase opportunity.
ABI, however, said last week that a year-long soft launch of TD-SCDMA services would involve as many as 60,000 dual-mode GSM/TD-SCDMA handsets and 15,000 data cards, with low-cost service plans to entice a young demographic to 3G experiences.
The handsets, subsidized to cost about $290 to $570, will be available at TD-SCDMA “experience” shops from both domestic and foreign vendors, including ZTE, Lenovo, Hisense, Samsung Electronics Co. Ltd. and LG Electronics Co., according to ABI. The mid- to high-end handsets are expected to offer wide screens, multimedia applications and cameras, ABI analyst Hwai Lin Khor said.
China Mobile will make its GSM/GPRS subscribers an offer of $7 per month and 9 cents per minute for video calling, with mobile Internet usage based on a flat, capped rate, according to the ABI analyst. The soft launch began in April in eight cities, including Beijing, Shanghai, Tianjin, Guangzhou and Shenzhen.
Chips and royalties
According to Strauss, the homegrown standard is designed to favor domestic Chinese vendors of handsets, chips and infrastructure, but because of Nokia Corp.’s massive, handset market presence, the top global vendors eventually will have a play in TD-SCDMA. Analysts have yet to assess whether Motorola Inc.’s market contraction has affected its presence in China, Strauss said.
“The fact is, Chinese consumers still prefer Nokia and Motorola phones,” Strauss said. “They’re brand conscious and associate international brands with quality.”
According to Thelander, Nokia might use a Nokia-badged, original design manufacturer (ODM) strategy to deliver TD-SCDMA products to China, possibly avoiding licensing issues with Qualcomm Inc., which claims IPR in the Chinese standard. Nokia and Qualcomm remain enmeshed in a cross-licensing dispute that affects Nokia’s ability to address CDMA-centric markets.
In fact, both Strauss and Thelander said, Chinese interest in TD-SCDMA has been driven, in part, by a desire to bypass the IP royalties demanded by Qualcomm. Speculation has it that Qualcomm has cut a deal with the Chinese government to license its CDMA2000 1x EV-DO, W-CDMA and TD-SCDMA intellectual property to domestic Chinese chip and handset vendors.
But that doesn’t relieve the multinational handset vendors of paying Qualcomm royalties on their own, mutual terms, governed to a degree by cross-licensing, the analysts said.
Qualcomm executives were unavailable for specific queries on the company’s licensing position vis-a-vis TD-SCDMA, but the company issued the following, paraphrased statement on its perspective.
“Qualcomm supports all 3G CDMA standards, including TD-SCDMA, and will contribute to the successful development of TD-SCDMA, to the extent it is commercially deployed,” according to Christine Trimble, senior director of corporate communications at Qualcomm. “To date, we have licensed approximately 85 companies for W-CDMA/TD-SCDMA globally. Qualcomm fully supports the Chinese government’s activities in encouraging competition and industry development.”
Texas Instruments Inc., the second-largest wireless chip vendor behind Qualcomm, had had a financial interest in Commit, an alliance of investors and technology companies seeking to offer a TD-SCDMA solution, but that effort has disbanded, TI said. The company issued the following, paraphrased statement on the Chinese news of 3G license awards.
“TI’s newest, multicore baseband processor is a multi-carrier, multi-interface solution that supports TD-SCDMA. TI had been active in Commit with technical and financial involvement, but due to lower than expected demand for Commit’s TD-SCDMA solutions, its board voted to dissolve the consortium. TI remains committed to customers who serve the TD-SCDMA and greater China market with our application processors and connectivity solutions for Bluetooth, GPS and mobile Wi-Fi.”
Among TD-SCDMA chip vendors are various groups with an array of investors and customers, including T3G (participants include Datang Mobile, NXP Semiconductors, Samsung and Motorola Ventures), Datang/MediaTek and Spreadtrum, according to Thelander.
Neither Nokia nor Motorola made announcements last week on their TD-SCDMA plans and Nokia was unable to respond by deadline to an inquiry on the issue.
According to Thelander, the rollout and uptake of TD-SCDMA will be slow and gradual. As uptake of TD-SCDMA occurs at China Mobile, however, Thelander envisions three possible scenarios.
The standard may thrive and fulfill a Chinese vision of recognition for its technical prowess and possible international expansion of the standard, the analyst said. Or it may suffice as an interim technology, without international market applications. Or, the standard may fail as it sees heavy subscriber use, leading the Chinese to embrace a more universal technology road map that returns it to LTE or WiMAX, for instance.
