The developer of China-patented 3G technology TD-SCDMA can now stop worrying about capital shortages as it has received the biggest-ever loan to be extended by the country's strategic banker.

The Shanghai-listed Datang Telecom Technology Co Ltd said it has received a technological support loan of 300 million yuan (US$37 million) from China Development Bank (CDB).

Prior to this loan, CDB had extended a loan of 200 million yuan to Datang last June to facilitate the latter's development of the TD-SCDMA, or Time Division - Synchronous Code Division Multiple Access, standard.

It has promised to grant another 300 million yuan early next year, taking its total financial support to Datang to 800 million yuan.

Market analysts said the loans are indicative of the China telecom authority's continued preference for domestically-developed 3G technology as the primary standard for the pending 3G market. They expect the authority to issue the first business licenses for 3G next year, ushering the country's telecom market into a new era.

Datang has long been under a financial cloud due to its poor business performance. Early last month, it was the subject of a probe by the securities market watchdog for its allegedly disclosing misleading information.

On news of this, shares in the company plunged 9.61 percent and closed at 7.81 yuan (95.3 US cents), dragging down those of other listed companies in the 3G and telecom sector. The outcome of the probe is still awaited, however. Two years previously, the group was probed by the securities market regulator on its alleged involvement in a scandal affecting another listed company.

(Shanghai Daily December 28, 2005)