About this time last year, China Economic Review was planning a telecom story to roughly coincide with the issue of the next generation 3G mobile licenses.
"They’ll come in the first quarter of 2006," people were saying, sending the Hong Kong share prices of Chinas Mobile, Unicom, Telecom and Netcom into a frenzy.
Needless to say, the licenses were not forthcoming and the peak and trough in the telecom stock prices was merely the first in a series of expectation-followed-by-disappointment fluctuations.
And now we discover that China has launched the world’s first 4G standard while its 3G counterpart still sits in the blocks. Apparently, the 4G "FuTURE Project" – which allows data transmission at 100 megabytes per second – will soon start trials running to 2010.
And then what? Will this standard eventually see the light of a commercial day?
By most accounts, 3G has been delayed due to problems with TD-SCDMA, China’s homegrown version of the telecom standard. Apparently the kinks are now ironed out and it is ready for deployment – and it can compete with the established 3G standards WCDMA and CDMA2000.
But is this really the point? China cannot allow TD-SCDMA to fail due to the political and financial capital that has been shoved behind it. White elephant or not, someone is going to be landed with the dubious honor of carrying this national technological torch.
It’s quite possible that the continued delays in the issuing of licenses is not so much driven by system hiccups as fierce lobbying by the telecom operators over who doesn’t get TD-SCDMA.
What does this mean for 4G? The risk is it will simply be a repeat performance of 3G – a standard that came to the market hopelessly late because it was developed behind closed doors, away from the commercial forces that should direct its evolution.
