The future of Chinese 3G technology and how it is licensed by the government is in doubt today after it failed a five-month trial.

Chinese next generation phone networks are to be based on the home-grown TD-SCDMA technology. But a five-month government trial has concluded the technology is not ready for commercial use. Problems include "lack of workable handsets, dubious stability and poor reliability of TD-SCMA's core network", China Daily reports. The failure of the trial may mean changes to how the government offers licences - it will have to wait until the technology is ready or choose to go with a European or US standard. The test results were released at the China Global Summit in Beijing.

Despite this hiccup, China will certainly press ahead with TD-SCDMA. According to some estimates, the country could save up to $10bn in lower import costs and by avoiding expensive 3G royalties, if it uses its own homespun technology and favours local manufacturers.

The Chinese Ministry of Information Industry tested three standards - its own TD-SCDMA, European WCDMA and the US standard CDMA2000. The European and US networks were both considered ready for commercial operation by the ministry, while it described its own variant as progressing well. China is likely to approve more than one standard for use.

Handset makers and component suppliers have mostly shown a marked lack of enthusiasm for TD-SCDMA, but this is slowly changing. In June, NEC threw its hat into the ring, setting up a new 3G-focused company to target China's 270m subscribers. And last month The TD-SCDMA Association announced that STMicroelectronics was joining up. It said it was talking to 10 foreign equipment makers, including Siemens and Nokia. ®

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