3G – The Natural Follow-up to China’s Olympics

What about 4G? With 4G, “on the horizon,” near-term moves on 3G in China might seem ill-timed. This is foolish; 4G is far from ready and 3G’s maturity assures its longevity. Still, the emergence of 4G in the medium-term puts special demands on Chinese 3G networks. 3G networks and services will need to prove the 4G business case while RAN solutions will need to support 4G upgrades. This plays directly into the plans of Huawei and ZTE, given their base station platforms supporting 2G, 3G and 4G technologies. They’re not alone (Ericsson, NSN and Motorola have similar capabilities). Ultimately, whoever the vendor, the capabilities should be important.

What about TD-SCDMA? TD-SCDMA’s success has surprised plenty of people. Success? The figures speak for themselves: 30 handset manufacturers; 100+ devices; multiple network vendors; China Mobile’s aggressive deployment plans. Unfortunately, this isn’t enough to turn the technology into a true, scalable, global standard. Given broader industry support, TD-SCDMA was well positioned against TD-CDMA for 3G deployments. Today, the evolution of TDD-based 4G technologies obviates any critical need for TDD-based 3G. Without success outside of China, the technology will always be at a scale disadvantage, success inside China will be difficult to engineer and TD-SCDMA should be on a PAS-like trajectory of eventual obsolescence.

What does this mean outside of China? Chinese 3G is so broadly interesting because its impact will be felt well beyond China. Chinese deployments could signal the value of 3G in emerging markets. Network builds should drive new multi-generational base station solutions, paving the way for network renewals elsewhere. In a “flat-ish” wireless market, China holds out the prospect of supporting vendor revenues. For all of these reasons, it will doubtless be a topic that’s closely watched for the rest of the year, whether or not licensing actually takes place this year.