Telecommunications: Primacy of Power and Regulatory Battles for Promoting National Standards - Part 16

The world's leading vendors, including Nokia, Motorola, Ericsson, Siemens, and Alcatel, have entered the market to provide infrastructure network equipment and handsets compatible with the TD standard. Clearly, the attractiveness of the Chinese telecom market has provided effective leverage over foreign MNCs which gradually, though reluctantly, accept the reality that they need to adopt TD in order to fully grasp the potential of China's lucrative domestic market. As foreign telecom equipment manufacturers lack experience in developing the TD standard, international giants such as Nokia, Ericsson, Siemens, and Alcatel are seeking cooperation with domestic TD equipment manufacturers for a share of the alluring Chinese market. Siemens is the first overseas telecom giant entering this field. The aggregate value of its investment in TD has surpassed 200 million euros. It holds a joint venture with Huawei by holding 51% of the stock. Alcatel has contributed 250 million yuan to work in cooperation with Datang. Since 1998 Siemens and CATT/Datang have worked together in the standardization and development of TD. Fujitsu, together with South China University of Technology, will develop a TD network in China. UT Starcom entered a partnership agreement in November 2002 with Datang for the development of TD core network infrastructure equipment. In January 2003, Philips Semiconductor, Datang, and Samsung established T3G in Beijing, with the goal of developing TD chipsets and handset platforms. Texas Instruments, Datang, Nokia, PTIC, and LG Electronics established COMMIT Inc. in February 2002 to develop open multimedia information products based on the TD standard. RTX Telecom, a Danish wireless solution developer, has been developing TD terminal platforms since 2000 in close coordination with Siemens.

This broad participation of foreign MNCs covering all important production chains of wireless telephony from base, telecom equipments, and handset makers to chip producers and services providers is crucial to the future success of the TD standard. According to Scott Kennedy, the main reason behind China's overwhelming record of failure in standards development to date is that several of the industry coalitions supporting unique Chinese standards have been narrow and weak relative to the coalitions formed by their foreign competitors (Kennedy, 2006). The TD coalition may be still weak compared with the industry coalitions of the other two competing 3G standards, but it is so far the strongest in China's standard development.

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