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Telecom suppliers seek government support
( 2002-08-12 09:24 ) (1 )

China's telecom equipment developers are calling for concrete government support for home-grown mobile telecom technology.

The government's hesitation in choosing which standard it will adopt in the coming age of third generation (3G) mobile communications is forcing developers of China's 3G mobile technology to speak out.

"China should adopt a technology developed by domestic institutions to avoid again becoming a battle field for overseas companies," said Li Shihe, chief scientist of the China Academy of Telecom Technology, developer of the 3G TD-SCDMA (time division synchronous code division multiple access) standard.

If China uses domestically developed technology, Chinese companies will pay much lower patent fees than those they would pay to European or American patent holders, Li explained.

The home-grown TD-SCDMA is up to international standards and has been approved by the International Telecom Union (ITU).

"Adopting TD-SCDMA means business opportunities - worth hundreds of billions of yuan - will be created for domestic companies," said Li. "This is not a patriotic issue; it's a matter of hard cash."

China did not grasp the development opportunities in the first two generations of mobile communications because of technology reasons. Major winners in China's prosperous mobile telecom market so far have been international telecom equipment giants such as Motorola, Ericsson and Nokia, not domestic vendors.

Not possessing the core technology means Chinese companies only earn meagre profits, although they produce considerable quantities of mobile phones and other mobile phone equipment for world markets.

After its approval by the ITU, TD-SCDMA attracted the attention of all equipment vendors, most of whom, however, remain skeptical, as TD-SCDMA is the youngest standard in the market.

German based Siemens, which is betting that TD-SCDMA will become a golden egg, have shown the strongest support for the technology and have invested millions of US dollars into related research and development.

Li Wanlin, chief technology officer of Siemens China, said TD-SCDMA has obvious technological advantages in frequency efficiency and is suitable for markets like China with dense populations.

Frequency availability, which cannot be expanded, will become more and more contested for as customer demand grows, he said.

TD-SCDMA's major competitors, Europe-based WCDMA (wide band CDMA) and US-based CDMA 2000, are becoming an increasing threat to the home-grown standard via their commercial operations in Japan and South Korea.

Having no commercialized equipment like handsets and base stations, the China Academy of Telecom Technology and Siemens are under heavy pressure to speed up commercialization of TD-SCDMA products.

The two parties, especially the Chinese developer, which invested billions of yuan into the technology, are eager to get stronger support from the government.