3G will achieve unprecedented success in China [Reprint]

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3G will achieve unprecedented success in China [Reprint] [Copy link]

Hundreds of schools of thought: 3G will be an unprecedented success in China


　　There is no doubt about whether China's 3G market will open, the question now is when it will surface. The issue of issuing licenses and choosing 3G standards has been discussed in China for a long time. What is certain now is that 3G will appear in the Chinese market at some point, and the final decision made by Chinese regulatory authorities will inevitably inject new vitality into the development of the mobile industry in the next few years.

　　Although winning 3G orders in China does not mean an increase in operating profit margins, but is more about gaining more market share and improving the company's reputation, European network equipment dealers, such as Ericsson and Nokia, are clearly unwilling to miss the business opportunities inherent in the Chinese 3G market.

　　At the same time, some small companies also hope to get a share of China's 3G market, and see it as the last and best order they can get. Other distributors, such as Alcatel and its acquisition targets Lucent, Nortel Networks and Siemens, also pin their hopes on China's 3G orders to establish their position in the global 3G market. In addition, China's top companies such as Huawei and ZTE are also looking forward to receiving a large number of projects from the Chinese government.

　　Just imagining this kind of competition is enough to understand why there has been a wave of mergers in the telecom infrastructure sector, from Alcatel and Lucent merging to create a larger company to Siemens spinning off its money-losing mobile phone division to focus more on network equipment.

　　Indeed, the current 2G service and infrastructure market is still profitable, but the huge amount of money invested in 3G research and development has forced many businesses to shift to the new generation market and strive to occupy a more advantageous position in the 3G market in the future.

　　Obviously, China will choose TD-SCDMA, the 3G standard it developed independently. They are not satisfied with using the other two standards: WCDMA and CDMA2000. This means that China will have independent intellectual property rights, and therefore no longer need to rely on the technology of other companies and no longer need to pay patent royalties.

　　Chinese regulators have not yet issued 3G licenses. On one hand, this may be because TD-SCDMA technology has not yet matured, and China hopes that TD-SCDMA will eventually compete with WCDMA and CDMA2000. On the other hand, it may be that China's leaders are biding their time and observing the development rate of the 3G field.

　　After all, the popularity of 3G cannot yet surpass that of 2G. If the services provided by 2G are sufficient to satisfy users, then who would still invest money in 3G?

　　Regardless of the reasons for the delay in issuing 3G licenses in China, once the 3G market in China is launched, WCDMA's position will be strengthened again. In addition, since China currently has a CDMA network, it is very likely that at least one of the 3G licenses issued will be a CDMA2000 license. CDMA2000 supporters believe that CDMA2000 will definitely have a place in China's 3G market.

　　Furthermore, there is no doubt that TD-SCDMA will appear in the Chinese market. However, as far as we know, it is still difficult to commercialize this technology. However, although TD-SCDMA may not be the best 3G technology, it is bound to be born in China due to the support of the government. And the supporters of this standard have begun to make plans for the future operation, such as Ericsson and ZTE signed a strategic cooperation agreement on TD-SCDMA, Siemens and Huawei established a joint venture, Nokia and China Putian joined hands, and Alcatel/Lucent and Datang established an alliance.

　　The price pressure on 3G infrastructure and mobile phones is much greater than that in the 2G era, and once the Chinese 3G market is launched, this price pressure will further increase. Therefore, foreign dealers will face a dilemma: on the one hand, they must launch the Chinese 3G project to maintain their company's reputation and protect their market share; on the other hand, their operating profit margins have been compressed so low that they can't bear the burden. Therefore, some dealers will eventually realize that they can't carry out the Chinese 3G plan to the end.

　　Similar to the Indian market, the Chinese market is extremely large and is currently driving the direction of the mobile industry. Although 3G may not be widely popularized in China due to its large population, the huge size of the Chinese market means that 3G will surely succeed in China in the future, and this success will be something that has never been achieved in any other market.

　　Regardless of what decision China's regulators ultimately make and when, their proposals will also reveal which companies will participate in China's 3G wars and which companies will not.