How far will China go to make TD-SCDMA a success?

The Chinese government's adamant quest to push the home-grown TD-SCDMA 3G standard looks like it could end up hurting the world's largest mobile operator China Mobile, which until recently has been putting on a happy face when it comes to the standard. Before the Olympics, we heard rumblings that China was going to issue a tender for the second phase of its rollout. But recently, the head of China Mobile admitted TD-SCDMA technology was "a few years behind" WCDMA and CDMA2000 because of problems with handsets, according to a report in the Financial Times [1].  

That's not good news for China Mobile, which will be the only player competing with TD-SCDMA, although it is expected to receive a WCDMA license too. However, the company's' rivals are expected to move ahead with WCDMA and CDMA2000 technologies once they receive 3G network tenders and aggressively attack China Mobile's subscriber base. China Mobile has already spent some $2 billion on trials using TD-SCDMA in 10 Chinese cities since April. As of early July this year, three months into its commercial TD-SCDMA trials, China Mobile only had 52,000 users, of which 8,000 were paying for the service.

China Mobile's admission is interesting given the fact that back in 2006, the Chinese government worked hard to give TD-SCDMA a level playing field by halting all WCDMA test networks. The Chinese government has continually delayed its issuance of 3G tenders to give TD-SCDMA time to develop. Will it delay the awards again? And will that even give TD-SCDMA a leg up given the vast economies of scale that WCDMA and CDMA2000 are enjoying and will continue to enjoy going forward?

Clearly, if TD-SCDMA were being developed in a truly free-market society, it would be dead by now. But the Chinese government appears to have no intention of backing off from the technology. It has now become a political issue: win at all costs even to the detriment of China Mobile. The question is: Just how far will the Chinese government go to make sure TD-SCDMA gets equal footing with today's 3G standards? Given the fact that TD-SCDMA remains so far behind, I wonder if we'll ever see 3G in China.-- Lynnette [2]