The TD-SCDMA Drama – who win and who loss

The post I wrote about China Mobile got a quite few feedbacks. Thank you for reading it and even more if you have left a comment.

Some of the readers are quite mad that I am not supportive of the home grown 3G standard, calling it the worst among the three licences.

First of all, I call it the worst, purely from a performance point of view. I don’t care where it is made. And if you have problem with that, check with a technician, or someone who has tried the different services, i.e. China Mobile’s 3G, China Unicom’s and China Telecom’s.

Secondly, I would like to take the opportunity to discuss about TD. Whether it is a blessing or a curse for China, as a whole. I first studied TD in 2007. There was a national conference on technology in Shenzhen. I was still working for South China Morning Post in Hong Kong. So, I crossed border to attend the conference. Lots of interesting stuff. And there was a whole section about TD-SCDMA. I’ve already known by then, it is something important. And I spent a whole afternoon, talking to the persons in the different booths. I also made friend with one of them. His name is Andy and he worked for a company called Commit. It was one of the four companies that made TD-SCDMA baseband chip. For people who don’t know what is baseband chip – it is one of the most important chip in the mobile phone, responsible for communication. And it is the key of TD technology. Before Commit, Andy worked for Datang – the company which invented TD-SCDMA and holds its core IPs.

Andy currently works for Huawei on TD-LTE. So, he basically built his whole career on TD. But, what is he view on TD ?? He thought China did not get anything out of it.

Datang, which invented the standard, does not earn much on loyalty fee. The domestic manufactures, which are supposed to benefit from making products of the home grown technologies, do not prosper, either. In fact, Commit has gone out of business. (ZTE and Huwei are benefiting from making 3G infrastructures for the operators – but they offer solutions for all the three standards.)

Originally, as Qualcomm holds most of the 3G IPs, China hoped by developing its own standard, it can bypass Qualcomm, and save the loyalty fee in building its 3G network. But TD is not original enough, and TD products still have to use many Qualcomm IPs. (That is part of the reasons Datang does not have much loyalty fee. Another reason is TD is not popular enough.)

As the development of TD was funded by China only, it was slow and painful. The deadline for finishing TD development was delayed again and again. So, the granting of 3G licences in China was also delayed again and again. Andy said, all in all, if there was no TD, China would have 3G five years earlier.

A five-year delay is critical for many of the startups who was banking on the popularity of mobile internet. 5 years ago, many of them started their business hoping 3G would come and people would start surfing the net with their phones. One of them is a Shanghai company which provide mobile search. But, 3G did not come until recently. And today, that company is still small, with about RMB 20 million revenue. The CEO is very supportive to Chinese government. China Mobile is his business partner. But, even he agreed, if 3G could come 5 year earlier, his business will be in a much better shape.

As of the end consumers, if 3G could come 5 year earlier, today, they can enjoy a much cheaper rate for going online with their phone.

In conclude, I think no one win in this TD business. Andy said, for 4G, the Chinese government is not going interfere anymore, it will let the market decide.