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Beijing to have 3G service but with hiccups

30 июня 2008

China has long promised that third-generation mobile phone technology will be available at the Beijing Olympics, but international travelers shouldn't expect seamless service.

The two 3G standards widely available in the rest of the world are unlikely to work in Beijing, experts say, meaning visitors will be faced with the choice of either getting a new phone that uses China's homegrown technology or putting up with significantly slower Internet connections than they're used to.

Beijing has thus far only made arrangements to offer 3G - which allows high-speed Internet surfing and video downloads - through a locally produced standard called Time Division Synchronous Code Division Multiple Access, or TD-SCDMA. The other 3G technologies - CDMA2000 widely used in North America and
South Korea and Wideband CDMA, used in Europe and most of Asia - have been offering users high speed mobile Internet for years.

Beijing has never licensed mobile operators to use them in China, opting instead to wait years for the development of TD-SCDMA.

China Mobile Communications Corp., parent of Hong Kong-listed China Mobile Ltd., said it will offer TD-SCDMA during the Olympics in partnership with
South Korea's Samsung Electronics Co., the world's No. 2 cellphone maker by shipments.

A China Mobile spokeswoman declined to give further details of the collaboration, but the official Xinhua News Agency reported in May that the two companies have provided the Beijing Olympic Committee with 15,000 handsets running on the technology.

There has been no announcement on other 3G technologies during the Olympics, and analysts say it is unlikely they will be provided.

Tucker Grinnan, head of Asia telecoms equity research for HSBC in
Hong Kong, says it would be technically possible to erect temporary base stations offering international 3G standards in a few places, but he doubts that it can be done in such a short time before the Olympics.

"With everything else that's going on, it's not clear that facilitating international 3G roaming is a priority of the Chinese government leading up to the Olympics," Grinnan said.

The Beijing Organizing Committee for the Olympic Games declined to comment on what 3G standards would be available.

Duncan Clark, head of Beijing-based research firm BDA China, said the problem will extend to visitors' laptops as well as their phones.
Especially in Europe, consumers use WCDMA-based data cards in laptops that give them fast Internet access from anywhere. Those cards run at 3.5G speeds, even faster than 3G.

If reporters or other professionals bring those cards to
Beijing hoping to use them, they will automatically shift down to EDGE, a 2.5G technology offering much slower connection speeds, Clark said.

"It will be a disappointment to Olympic visitors and it's a missed opportunity for
China," Clark said.

Even those who manage to acquire a TD-SCDMA phone or a data card may find problems with the service, some say.

China Mobile has been testing TD-SCDMA in eight cities, but the results are less than stellar. BDA China said in a report they tested some TD-SCDMA phones and found problems including "erratic service quality, expensive and immature handsets, weak transmission signal, and limited coverage."

A China Mobile spokeswoman declined to comment on the report, but said that the company is adding more TD-SCDMA base stations to improve signal strength. Long Wait For 3G Licenses

Any inconveniences faced by visitors during the Olympics pale to the frustrations faced by China's mobile carriers and equipment makers that have been waiting for years to cash in on 3G but are constricted by Beijing's focus on promoting local technology.

China Mobile and China Unicom Ltd. would have moved to offer 3G services to users long ago if it was up to purely commercial factors, said Grinnan.

"People think of these as private companies, but they are actually instruments of state policy," he said.

China Unicom and China Telecom Corp. hope to grab market share from near-monopoly China Mobile by offering international 3G standards once they are allowed to do so, people familiar with the companies' plans told Dow Jones Newswires.

The two operators declined to comment on what 3G standards they plan to offer.

China Mobile, meanwhile, has been saddled with the responsibility of developing TD-SCDMA. To date, its parent company has spent CNY15 billion ($2.2 billion) developing the technology, according to a China Mobile spokeswoman.

For years,
China's innovative telecom equipment makers like Huawei Technologies Co. and ZTE Corp.(0763.HK) have been selling 3G handsets and network equipment around the world, but so far not in their home market.

Chinese regulators said last month they will issue 3G licenses after the restructuring of China's telecommunications industry, which will merge six operators into three. There is uncertainty, however, as to when exactly the restructuring will be completed. The series of mergers are to be closed at the capital level by the end of the year, but operational integration will take longer. Grinnan estimates it could take 12 to 18 months.

is expected to grant a TD-SCDMA license to China Mobile, a CDMA2000 license to China Telecom, and a WCDMA license to China Unicom.

The ambiguity over timing gives
Beijing the flexibility to further delay the introduction of international 3G standards, giving China Mobile more time to develop TD-SCDMA, analysts say.
They note investors counting on 3G to boost China's equipment makers and mobile carriers shouldn't hold their breath.

"Technology policy does really matter to the Chinese government," said Grinnan."They have a very long time table, and they're not really concerned what foreign investors think in the short term."

Источник: Total Telecom

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