China's choice

The 3G situation in China was finally clarified in 2008. The Chinese operators had then complied with demands from the authorities and reorganized into three groups, each operating both fixed and mobile telephony. For example, China Mobile had taken over the fixed-line operator China Tietong to meet these requirements.

Each of the three competitors now received a 3G license for its own specific standard: China Telecom for a TD-SCDMA network, China Unicom for a WCDMA network and China Telecom for a CDMA2000 network.

With 70 percent of China’s mobile subscribers, China Mobile is the dominant operator.  To give some idea of the scale, China Mobile plans to have 160,000 3G base stations operating at the end of 2009 and the target of 100 million 3G subscribers by the end of 2012. At the start of the year, it had about 460 million subscribers and was growing at the rate of 6 million per month.

China Mobile’s first choice was not TD-SCDMA. CEO Wang Jianzhou has stated in an interview that the networks and terminals will be more expensive because they have to be based on their own standard. Yet the company also enjoys economies of scale because of its enormous subscriber base; in time this may lead to the efficient use of resources and offer benefits in international expansion, for example.

Svanberg observes: “Despite its focus on its own 3G standard, China has had an open attitude to international standards. Chinese thinking is logical and long term. Because China Mobile has become so dominant, it is probably wise to allow it to take charge of the Chinese standard. In this way, the basic Chinese network will be more homogenous.”

The three major vendors in the Chinese market in 2009 are Huawei, ZTE and Ericsson. “We have not lost any market share,” says Svanberg. “We are the only participant working with all three standards. All the Chinese operators are building their 3G networks with one eye on LTE. When that is in place, there will be the same standard for all of them – and the market will be totally open.”


Author: Svenolof Karlsson & Anders Lugn

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