Mature markets will shun China's 3G standard

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Mature markets will shun China's 3G standard

China's home-developed 3G standard will struggle to win acceptance outside the country, telecoms analysts predict.

"TD-SCDMA is likely to face an uphill battle outside mainland China," said Hwai Lin Khor, an analyst with ABI Research.

The Chinese government postponed the 3G rollout for several years while local and foreign researchers struggled to perfect TD-SCDMA. The authority is expected to issue 3G licences by this summer.

The government backed research into TD-SCDMA following complaints that basic technology royalties from China's booming telecoms sector were all going to foreign companies.

The TD-SCDMA Industry Alliance, which represents firms behind the standard, claimed that TD-SCDMA will race from zero market share to between 14 and 35 per cent of new handset sales by the end of 2008.

However, hopes that the new standard can compete outside its protected local market may remain unrealised.

The government-backed 3G standard may even be a hard sell in the semi-autonomous Chinese city of Hong Kong, according to Khor.

This is despite the fact that Hong Kong telecoms regulators have moved to strengthen local roaming support for Chinese mobile phone users.

"It is no surprise that TD-SCDMA will eventually make its move into [Hong Kong] once the Chinese government has finalised its 3G outcome," said Khor.

"However, the success of TD-SCDMA in a mature market such as Hong Kong's is heavily dependent on market forces. It will face tough competition outside mainland China."

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