China’s leaders won’t be the only ones applauding when the Olympic torch lights up Beijing’s nest-shaped National Stadium next August.
The country’s tech and telecoms set will be heaving a sigh of relief because it should mean China’s long-delayed next-generation, or 3G, mobile phone networks will finally be ready.
“Three or four years ago, [people] might have thought there would have been tens of millions of 3G users by the Olympics,” said Dave Carini, a co-founder of telecommunications research group Maverick China. “Now, the safer prediction is a very limited [3G introduction], but nothing spectacular nationwide.”
China’s 3G networks, which can deliver data at faster speeds than currently possible, have been in the works for years. But roll-out attempts have been halted by industry restructuring and problems with China’s own 3G standard, TD-SCDMA. Yet the industry and government always used the Olympics as both an excuse and motivator for 3G’s eventual unveiling.
Trial networks are being built to test TD-SCDMA this year. In October, China Mobile will invite handset manufacturers to bid for TD-SCDMA tenders. By next year, some form of 3G, most likely TD-SCDMA, should be available.
It is unclear whether licenses for the two main global 3G standards, CDMA2000 and WCDMA, will be issued in time for the Olympics. Without global standards in place, tourists visiting during the games won’t be able to use their 3G handset, which would reflect poorly on China’s push to position Beijing 2008 as a high-tech showcase.
Sohu sponsorship
The organizers of the games have officially billed the event the “high-tech Olympics,” and there is perhaps no better example of this than Chinese web portal operator Sohu. It paid “hundreds of millions” of yuan to call itself the Olympics’ first internet content sponsor, which means it runs the Beijing 2008 official website and has rights to publish Olympics-related content through its portal.
“This is a win-win situation and it’s happening for the first time in Olympics history,” said Chen Luming, Sohu’s vice president of Olympics sponsorship.
Beijing 2008 may also boast another technological first: China’s first citywide wireless internet network – or the foundations of one, anyway. China Mobile has said it will install networks in host cities, although coverage is likely to be limited to Olympics venues and tourist hotspots.
According to Liu Qingchang, vice president of corporate finance at China GrenTech, which is providing equipment for China Mobile’s wireless network, the Olympics networks will be the base for future citywide coverage.
The rising tide
The Olympics technology push that is enabling the likes of GrenTech to move from mobile phone network equipment into wireless internet products, is likely to have pervasive effects on the tech industry, according to recent research by investment bank Citigroup.
Jason Brueschke and Catherine Leung argue that a rise in demand for online advertising, paid web searches and internet ticketing for travel and tourism will benefit local tech companies like Tencent, Baidu and Ctrip as well as Sohu.
“We expect Sohu to deliver a very strong number for its portal advertising business in the second quarter of 2007 as advertisers start to market 12 months ahead of the Olympics,” the report said.
The Olympics, besides being a revenue booster, will also give China’s relatively young tech industry a rare shot at mainstream global exposure.
“[The Olympics] is one of those game-changing events for local [tech] companies,” said Sage Brennan, research director at technology research firm JLM Pacific Epoch in Shanghai. “They could really gain an international footprint.”
Beijing’s “high-tech” games could end up being the most wired Olympics yet, but that doesn’t mean much in an industry where obsolescence is measured in months. The games are helping tech firms with event-driven earnings but they aren’t helping to break new boundaries.
As Maverick’s Carini noted, the top-heavy way which new technologies for the games are being implemented – in 3G’s case a reliance on ministerial edicts – could have hindered rather than helped the country’s technological progress.
“In a free market, you might have a dozen cities in other parts of China providing their own Wi-Fi networks, the way it’s happening in cities across the Western world,” he said.
“The overall sense of the Beijing Olympics is… they’re doing things that are pretty well proven. I don’t see it as being particularly bold in technology; if anything, it’s a little bit conservative.”