Report: Trials of China's 3G technology went 'badly'

China expected to issue licenses for 3G services to operators sometime next year

SHANGHAI -- In a possible setback for China's 3G (third-generation) mobile telecommunications plans, recent trials of the country's homegrown 3G technology went "badly," according to the official China Daily newspaper.

Calling news of the trial results "disappointing," the China Daily reported that tests of the TD-SCDMA (Time Division Synchronous Code Division Multiple Access) technology showed phones could only be used to make voice calls and send short text messages. The tests were "less successful" when making video calls or downloading video clips, the report said, citing unnamed industry sources.

The China Daily report blamed the problems on shortcomings in TD-SCDMA handsets, which it said are not yet ready for commercial production.

"It's certainly not good news, but we've heard mixed reports before this," said Ted Dean, managing director of telecommunications consultancy BDA China, in Beijing. Dean cautioned against reading too much significance into the China Daily report. "It's sometimes hard to read what these types of reports mean," he said.

BDA expects that China will issue licenses for 3G services to operators sometime next year. Government regulators have not released a timeline for issuing the long-awaited licenses, but most observers had expected them this year. However, there have been recent signs indicating that the government will likely wait until next year, Dean said.

"Vendors now seem to be making their plans around the expectation of further delays," he said.

Plans to issue 3G licenses in China are dependent on several factors, including the availability of TD-SCDMA technology and a planned restructuring of China's telecommunications industry, Dean said.

The Chinese government has considered plans to restructure the telecommunications industry in preparation for issuing the licenses, but no decision has yet been announced, Dean said. The government has also indicated that the readiness of TD-SCDMA will play a role in determining when 3G licenses are issued, making it difficult for officials to hand out licenses before the technology is ready for commercial deployment, he said.