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China's 3G spec still deferred

Posted: 16 Mar 2007 ?? ?Print Version ?Bookmark and Share

Keywords:TD-SCDMA? China's 3G standard? TD-SCDMA? 3G phone? RF transceiver?

Wait. Wait some moreand then a little more for good measure. Patience is a survival strategy in the 3G game in China. And after about four years of waiting, now it looks like chipmakers will be strung along a little more as 3G licenses may be pushed out to next year instead of early this year, as originally thought.

Delays in 3G are almost as synonymous with China as green tea. No one knows for sure what will happen, since Beijing is covered in a shroud of opacity. But the state-controlled media reports that testing of China's 3G standard has been extended into Q4, killing any shred of hope handset chipmakers had for cashing in on 3G phones this year.

For the small chipmakers who are betting on TD-SCDMA, the testing delay is very sour news, especially after encouraging reports from government insiders that the country's largest mobile carrier, China Mobile, would deploy the technology. "It looks like this year will mostly be about building the network infrastructure," said Vincent Tai, chief executive of Shanghai-based RDA Microelectronics, which has developed an RF transceiver and power amplifier for TD-SCDMA. "It's possible that it could happen this year, but probably not."

Unpredictable market
At Comlent Inc., another Shanghai company with an RF transceiver, "We're not targeting having production-ready chips until Q3 or Q4," said Kai Chen, CEO. "Base-station deployment has not lost any momentum and continues to build up. As for when the handset market will pick up, it's hard to predict."

Other small local companies that will be affected in the short term include T3G Technology, Commit, Rising Microelectronics and Spreadtrum Communications Inc. Spreadtrum may be more adversely affected because it is rumored to be planning an IPO, with the story of TD-SCDMA being a major growth theme.

China has more than 400 million mobile users, with millions more signing up every month. Spending on 3G will easily run into the tens of billions of dollars in the next few years as networks are fully built out. But China has held back on issuing licenses because of the immaturity of its local standard, leaving confounded chip and gear makers to await the spending spree's start.

Chinese officials have repeatedly said 3G will be ready by the 2008 Summer Olympics. It may be, but perhaps only in the cities hosting Olympic events.

Duncan Clark, a Beijing-based telecom analyst for BDA China Ltd, said the government's desire to restructure the telecom industry before issuing 3G licenses adds to the delay. The goal is to strengthen the flagging fixed-line operators, possibly through a merger with one of the wireless carriers. "It's going to take a long time to sort that out, so our view is that 3G will happen next year," he said.

A lack of TD-SCDMA handsets also remains a problem. Clark estimates there are a couple of dozen vs. a variety that runs into the hundreds for the competing standards, W-CDMA and CDMA2000 1x. Tai said that as the chipsets mature, TD-SCDMA will draw many more local handset makers to the market.

Late last year, chipmakers said that data links for TD-SCDMA handsets had finally reached 3G speeds, or 384Kbps. Still, voice connection reliability ranges from 80 percent to just over 95 percent, depending on the handset. The government target is 95 percent.

- Mike Clendenin
EE Times

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