Among the three telecom operators in China, China Mobile has the 3G license for TD-SCDMA.  But, how serious is the operator in developing the home grown 3G network?  According to an industry source, China Mobile is not serious at all.

“TD was forced upon China Mobile by the government.  They don’t want it, ” said the industry source, “Now, they are developing TD-LTE, the 4G standard, as fast as they can.”

TD-SCDMA: weak launch, improving gradually, yet still lagging

In 2006, China’s Ministry of Industry and Information Technology (MIIT) came up with an answer to what it saw as a vexing problem: the millions of dollars in licensing fees Chinese companies would have to pay to foreign patent holders as the country rolled out its 3G network.

The solution was to mandate the use of a homegrown standard, TD-SCDMA.  The technology, developed with government funding, had shortcomings. TD-SCDMA was slower than W-CDMA. It was less stable. In addition, it took a very long time to roll out; the trials finished two years later than planned.

China’s three state-owned telecom operators complained about the delay and at having to adopt a standard incompatible with the technologies being produced by the world’s major handset makers.  Beijing eventually relented, allowing China Telecom and China Unicom to have international standard 3G licenses (CDMA-2000 EV-DO and W-SCDMA) but required the biggest, China Mobile, to use TD-SCDMA.

While China Mobile has expended considerable efforts on improving TD-SCDMA recently, 3G connection speeds are still lagging significantly behind from that of China Unicom. A recent report by Credit Suisse showed that peak time (12pm-5pm) connection speed of China Unicom can range from 4X to 8X faster than that of China Mobile’s network.

TD-SCDMA is taking a toll on China Mobile’s market share

According to the newly released MIIT figures in March,  of the combined total of 61.9 mn 3G subs, China Mobile holds 44%, China Unicom 30%, and China Telecom 26%.

This is a big difference from the days of 2G when China Mobile used to hold 70% of the country’s mobile users.

With 3G handset penetration set to rise from 3.8% as of December 2010 to 10.2% in December 2011, data is becoming much more important for China’s subscribers, to remain competitive, China Mobile is trying hard in going for 4G. Although TD-LTE has TD as part of its name, it is developed mostly according to international standard.  If China Mobile can finish its 4G network in 2-3 years, it might be able to remain its leadership in the telecom industry.