Telecommunications: Primacy of Power and Regulatory Battles for Promoting National Standards - Part 15

China Mobile, ranked as the largest mobile operator in the world and currently servicing 75% of mobile subscribers in China, has been chosen to adopt the TD standard for its 3G network. As Xi Guohua hinted during the China National Telecommunication Working Meeting in December 2005, China's national standard will go to the most capable network provider (Wang & Liu, 2006). Recently, the president of China Mobile, Wang Jianzhou, stated that “TD standard is the one that China owns important intellectual properties, so it is our responsibility to adopt and develop TD standard” (Xiong, 2008). Since the reshuffle, China Mobile has built and operated a TD 3G commercial trial in ten cites including Beijing, Shanghai, and Guangzhou. The company will establish the network in 28 more cites during the second phase of expansion. According to the MII, about 300,000 users have signed up to the TD 3G network. In the meantime, China Telecom and China Unicom, which are most likely to adopt CDMA 2000 and WCDMA, still do not have government approval to build their networks or provide trial services, despite having conducted trial runs. Many market analysts believe that this is another preferential treatment granted to TD standard by giving it a head start over the other two standards.

Prospect of China's TD standard: Will it succeed in global competition?

Compared with many other Chinese standards, TD-SCDMA seems to be promising. Many factors contribute to its comparative advantages. First, different from the failed WAPI case, the stakeholders in this 3G standard competition are more diversified. Unlike the WAPI standard, which was developed independently by the PRC Broadband Wireless IP Standard Group with little communication with other standards organizations and no foreign participation, TD standard was initially codeveloped by China's Datang company and German telecom giant Siemens. It uses the basis of U.S. company Qualcommm's proprietary CDMA technology. After it was formally adopted by Chinese government as the national standard, many leading foreign chip makers, handset designers and telecom infrastructure equipment makers have been actively involved in the research and design of the relevant products that are compatible with the TD standard. For example, Sony Ericsson recently formed a strategic alliance with China's ZTE to collaborate on TD-SCDMA solutions for China. Siemens AG and Huawei Technologies Inc. formed a joint venture to develop TD-SCDMA products.

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