Chinese Telcos reshuffled

NO SURPRISES (see INQ passim) with the official news that China is reshuffling its four major telecoms companies into three entities so that they can all offer both fixed and mobile communications to customers.

Sadly there's few clues about what 3G licences will get issued and when. Licences will apparently follow once this reshuffle has finished satisfactorily. But everybody is still on tenterhooks since there's no clues as to exactly what kind of 3G licences will be issued.

Meanwhile, the Chinese government has urged the three newly-created companies to support 'autonomous innovation'. This has been widely interpreted as a coded message that they should give full support to China's own home grown 3G standard, TD-SCDMA.

The big question is how strictly will the new Chinese Telcos follow this 'official guidance'? The closest parallel the INQ can remember was when hints were dropped that the newly re-integrated Hong Kong should tear down its existing 3G networks in favour of TD-SCDMA. Nothing happened.

The whole new set-up really doesn't lend itself to TD-SCDMA establishing itself as China's dominant 3G technology. Take China Telecom, for example. This has acquired the Cdmaone based network formerly operated by China Unicom.

Commentators seem to forget that the whole USP to TD-SCDMA was that it enabled equipment to be shared between existing 2G infrastructure and the new 3G infrastructure. That's fine as long as you were running a GSM network. Totally useless if you're Cdmaone based.

How about the dominant mobile operator China Mobile? Well, it recently acquired the minnow China Tetong and is heavily involved in rolling out TD-SCDMA in time for the Olympic Games.

If you look at potential roll-out times, however, China Mobile could easily by-pass 3G entirely and start rolling out 4G (in the shape of LTE) in the same time space it would take to build a 3G network. Especially one based on the unproven TD-SCDMA.

Then we have China Netcom, the fixed line operator which will merge with China Unicom's GSM network. The company will relish this opportunity to seriously compete against the dominant player, China Mobile. So it's hardly going to enthusiastically support an untried technology like TD-SCDMA.

Then there's the question of data throughput speeds. TD-SCDMA looks very much like it is tuck in a timewarp and aiming at offering 384 Kbit/s. Compare that to the 3.6 Mbit/s which w-CDMA/HSDPA can offer now.

Then there's the problem of Chinese companies which have thrown their weight behind TD-SCDMA only to find that no substantial orders have been place. The INQ can't confirm this but waiting for TD-SCDMA orders might well have put Kaiming Semiconductor Corporation out of business.

Even if TD-SCDMA gets reasonable support, that's no guarantee that the big international players won't get a slice of the action. Siemens was always a strong advocate of the technology. And if you go to the TD-SCDMA Forum web site, you'll find Nokia Siemens Networks way up the top along with Nortel, Alcatel and Motorola.

So this re-organisation instead of boosting TD-SCDMA's chances might actually have put a nail into its coffin. µ

See also … More Chinese mobile shake-up rumours