China Mobile's 3G discontent

03 Sep 2008
00:00

China's biggest mobile company doesn't think much of TD-SCDMA, the expensive local attempt at 3G.

China Mobile CEO Wang Jianzhou says it's "a few years behind" other 3G standards, and has problems of choice, performance, quality and price in the handsets.

There's nothing new in these sentiments and in saying them Wang is merely echoing what informed critics have been saying for months about the performance of TD-SCDMA.

But of course his comments are revealing because he's the one who ultimately has to carry the can for the whole project. In case we were in any doubt he's not wild about the idea.

Speaking at a results announcement last week, he pointedly noted China Mobile had spent some $2 billion on TD-SCDMA trials and had taken over struggling China Tietong and its 40 billion yuan ($5.8 billion) debt (tellingly the TD investment, and risk, have been placed in the unlisted parent company).

Rivals China Unicom and Netcom, both bolstered by mergers, are likely to adopt W-CDMA and cmda2000 respectively.

Wang's remarks come just after the staging of the Olympics, where thanks to TD's slow progress was embarrassingly free of any commercial 3G.

The MIIT has put TD millstone around Mobile's neck because of its runaway success, owning some 70% of the mobile market and about 80% of the profits in the whole telecom sector.

Yet complain as Wang might, the only other solution would have been to widen competition. It's absurd that the mainland market has only a third as many fixed and mobile carriers as Hong Kong. The MIIT might also have considered meeting its WTO obligations to allow foreign operators to invest in the market in the same way as it has instructed China Mobile to take its business abroad. But there's no chance of that.

The TD handicap will help bring China Mobile back to the telecom pack and may even one day evolve into a viable technology. But it will do as little for consumers and competition as it will for China Mobile shareholders.

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