All eyes on Datang as TD-SCDMA phase three rolls out

20 Jul 2009

Once more local favorites ZTE and Huawei have won the biggest share of China Mobile's third and largest TD-SCDMA network tender, snaring 34% and 22% respectively.

But it is the fate of Datang Mobile that attracting attention. The state-owned vendor, which was set up to be China's TD-SCDMA champion, won just 16% of the lines, compared with more than 40% of the phase two rollout.

Just three weeks ago it was revealed that China Mobile planned to swap out its Datang-supplied Guangzhou network with gear from ZTE.

Now industry observers are wondering how long before its Shanghai and Nanjing deployments are also replaced.

Reportedly, Datang's gear is plagued with problems. In Guangzhou its equipment displayed five times as many faults as ZTE gear, in every aspect from transmission to power supply, according to, quoting an un-named carrier executive.

Even if its gear worked properly, Datang is disadvantaged by the growing scale of the rollout. ZTE offered to replace the Guangzhou network for free as part of its phase three bid. Datang's rivals in Shanghai and Nanjing will surely be doing the same before too long.

Tiny, loss-making Datang can't compete with that. The replacements will surely spark another discussion about the role of Datang, and perhaps yet another restructure and government bailout. The Datang Telecom Group has been counting on these network tenders to drive it into the black.

If Datang's equipment is as unreliable as reported, China Mobile faces a customer backlash so when customers start using the network in numbers in six months or so.

The one certainty is that Datang's latest stumble guarantees dominance by Huawei and ZTE of the TD gear sector.

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