China hedges its bets on 3G standards and Wimax.

China appears to be following a subtle strategy in its approach to 3G licensing. A general expectation has been created that 3G will be available for next year’s Olympic Games.

The government would naturally prefer to see its own national 3G standard, TD-SCDMA occupy a big part of the country’s 3G infrastructure rather than infrastructure based on foreign-backed standards. However the China government is mindful that the WTO is expecting it to offer licenses to companies offering other 3G standards, like the US-backed (Qualcomm) standard CDMA 2000, and the European-backed WCDMA. So the government hasn’t issued any 3G licenses, even though the Olympics is little more than a year away and it takes a year or so to build a 3G network. The China government has adopted the good old BT strategy of ‘when in doubt hold a trial’. It has embarked on ‘trials’ of TD-SCDMA in nine cities, some of which are hosting the games. They are home to some 80 million people. Networks for the nine cities will cost about $4bn. At the same time, it is reported that the China government is expecting to spend some $7bn on Wimax infrastructure over the next two to three years, and some infrastructure manufacturers are urging the China government to bypass 3G in favour of a Wimax-based 4G approach. So no one is holding their breath in the expectation of big 3G license wins for CDMA 2000 or WCDMA. Though what the Olympics has to do with 3G, or Wimax for that matter, escapes me. No one’s going to watch athletics on a cellphone. Not even beach volleyball.

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