Home-grown wireless technology prompts further market confusion

5 Mar 2003

US equipment manufacturer Qualcomm [Nadaq: QCOM] is facing stiff home-grown competition in China’s high speed wireless market following successful trials of new China-made time division synchronous code-division multiple access (TD-SCDMA) technology. The TD-SCDMA system is the product of a joint venture by state-backed Datang Mobile Communications Equipment and Germany’s Siemens [Berlin: SIEGn] that has been in development for more than two years. The technology, which claims to offer three-times the data and voice capacity of standard GSM, is being piloted in the south west city of Chongqing in cooperation with dominant cellco China Mobile Communications Corp (CMCC). The involvement of CMCC has fuelled speculation that the government will press for the state-owned operator to use TD-SCDMA over Qualcomm’s CDMA technology. China is still reorganising its telecoms industry and the news that CMCC is testing unproven technology has served to heighten confusion amongst investors after 3G licensing was put on hold whilst regulators evaluated costs and demand. Ironically, it was the government that pressed for CDMA to be implemented by CMCC’s rival China Unicom and if it now decides to back TD-CDMA it would throw the country’s equipment market, worth USD3 billion annually, wide open.

China