Global Economics

Nortel's Wang on China's 3G Era


With the country's homegrown standard ready for deployment, Beijing has to accept that it cannot control the technology's growth

Following years of anticipation, months of rumors and a couple of false starts, Chinese 3G mobile licenses are expected to be issued during the first three months of 2007. Licenses for foreign-developed WCDMA and CDMA 2000 as well as local incumbent TD-SCDMA are to be divided among the major mobile and fixed line network operators. It is in Beijing's interest to see that the domestic standard, which has yet to be commercially deployed, isn't crushed by its more seasoned rivals. The TD-SCDMA Forum was founded in 2000 as a community for all companies interested in China's homegrown 3G standard. As the group's secretary-general, Dr Jing Wang, who also serves as Nortel Networks' business alliance director in China, is one of the key promoters of TD-SCDMA. He talked to CHINA ECONOMIC REVIEW about his expectations for the standard.

Q: TD-SCDMA has yet to be deployed commercially. How does this affect the Forum?

A: We have been trying to push for the early granting of the 3G licenses for a long time. We have close ties with the Chinese government and embrace all companies that are interested in TD-SCDMA. We collect input from our members and give government officials the chance to talk to members directly.

Q: Why has there been such a delay in the licenses being issued?

A: TD-SCDMA started at least two years later than the other two standards. It takes time for the technology to become mature enough to be pushed into the market. As far as I can see, the speed of its development has been unprecedented. After four or five years of effort, TD-SCDMA is now in the last phase before commercialization.

Q: What advantages does TD-SCDMA have over WCDMA and CDMA2000?

A: I don't want to emphasize the good parts of this technology and try to deny the challenges. There are three standards in existence so far and each one has certain advantages over the others. We know that TD-SCDMA can provide basic 3G services. It has already been deployed in three cities and I'm sure next year you'll see more and more.

Q: It is said that TD-SCDMA works very well in dense urban areas.

A: In data intensive areas it should work well.

Q: The standard has been developed largely behind closed doors. How can foreign players be expected to have full confidence in it?

A: At the Forum, we have more than 400 members and then 40 senior members that are constantly receiving the latest information on TD-SCDMA. The only reason there is the feeling that it has been developed behind closed doors is because there is not much official news about it. The developers are working on it and don't want to say too much - they want to make it work first.

Q: To what extent does TD-SCDMA have a wider significance in terms of technological development in China?

A: As a starting point, it is very significant. Chinese companies are always subordinate in terms of intellectual property rights (IPR) and royalties. The government needs to use this opportunity to leverage up global competency of domestic companies by having more IPR developed locally. They have tried many times before to put their thinking into standards but it has not been very successful. TD-SCDMA is the first real opportunity for them to demonstrate that not only have their ideas been put into a standard but also that the standard has been productized and will be commercialized. This is a big experiment for them. Regardless how TD-SCDMA does in the long run, this experiment is in itself worth the effort.

Q: What are the chances of TD-SCDMA being pushed out?

A: There are many uncertainties here so I can't really predict what will happen. As a promoter of TD-SCDMA, I hope it prevails and the Forum believes some favorable conditions should be put in place for this late developing technology. There could, for example, be a time difference in when licenses are issued or there could be subsidies for TD-SCDMA handsets.

Q: To what extent can the government not allow TD-SCDMA to fail?

A: There is no way they can let it fail.

Q: So can we start calling it a guaranteed success?

A: Not exactly. There is no chance that this technology won't go to market. However, as to whether the current progress can be sustained and the technology start growing in the market, it is extremely difficult to project. It becomes an operation issue, user acceptance, market demand, everything. The government can make it into a standard, make it into a product and make it into a market reality. But the government cannot really control how it will grow.

Q: What are the key challenges going forward?

A: We did a TD-SCDMA workshop at the ITU World Telecom in Hong Kong [in December] and all the speakers were taking about services and terminals. Those are really the issues facing TD-SCDMA. Nobody questions whether this technology can be deployed - it can. But as it is pushed into market, how can it grow? They need to get the infrastructure in place but, once that's done, what will the user experience be like? Applications and services - that's the challenge and I believe we still have a lot of work to do in these areas.

Q: Where is China in terms of applications?

A: This is not exclusive to TD-SCDMA. All three standards are in the same boat when it comes to applications. The standards are just different access technologies; applications should be independent. Of course TD-SCDMA can be more suitable for some applications than others, but overall they share the same concept.

Q: If you wanted to ensure the success of TD-SCDMA, could you make certain applications exclusive to it?

A: I don't want to narrow down the TD-SCDMA applications. It's like building a highway - you have to build it wide enough to accommodate all kinds of vehicles but we don't want to identify which kinds of vehicles are best suited to this highway.


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