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Chinese telco jumps starting gun in 3G race

We don't need no stinkin' licences

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China's deployment of TD-SCDMA, its own incarnation of 3G, is well underway despite the fact that the government isn't expected to issue any 3G licences until after it completely overhauls the industry later this year.

China claimed it would have a 3G network in time for the Beijing Olympics, but with only a couple of months to go the fact that no licences have been issued would normally cast doubt on that prediction. But not in China where last month China Mobile launched its service in eight cites.

The service is being subsidised to encourage take-up, with monthly subscription costing $7, and video calls only 9 cents a minute. Unsurprisingly a recent study from ABI research concludes that "this price plan and service package will attract existing young subscribers to make the switch".

The Chinese government isn't planning to issue any 3G licenses until it's finished reorganising the industry into three competitors of roughly equal size. That involves China Mobile getting into fixed-line telephony by taking over China Tietong Telecommunications Corp, while China Telecom gets into mobile by acquiring the mobile part of China Unicom. The rest of that company is then "encouraged" to merge with China Netcom.

It's hard to imagine Ofcom, the UK regulator, deciding that KCom needs to take over 3, or that Orange should merge with Carphone Warehouse, but things are different in China and the process is expected to take around five months, after which 3G licences will be up for grabs.

But that means no 3G in time for the Olympics, and no opportunity for China to show off the TD-SCDMA* technology, thus the "trial" which involves selling 60,000 handsets and 15,000 data cards across eight cites including Beijing, Shanghai and Guangzhou.

Anyone deploying that kind of infrastructure before the 3G licences are even announced must be very confident they'll get one, but then... this is China, and things are different in China. ®

* Time Division-Synchronous Code Division Multiple Access - developed in an attempt to avoid paying patent fees to western companies, though it's hard to imagine the standard will achieve that completely.

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