TD Tech Ltd, a joint venture between Siemens and China's Huawei Technologies, is aggressively beefing up its marketing capabilities with the aim of becoming the top vendor of 3G (third generation) mobile infrastructure based on TD-SCDMA, a Chinese home-grown standard.

 

This marks a major shift in the business priorities of TD Tech and underlines the increasing momentum TD-SCDMA is gaining.

 

TD Tech, a 51-49 percent joint venture between Siemens and Huawei with a total investment of US$100 million, has mainly focused on technology development of TD-SCDMA.

 

The shift to marketing points to the increasing maturity of TD-SCDMA, said Klaus Maler, chief executive officer (CEO) of TD Tech.

 

"We have started paying more attention to marketing. And since the beginning of this year, we have doubled our sales force," he said in an interview with China Daily.

 

"Also we have invested a lot in our service organization (to support operators after the 3G market is initiated)."

 

TD-SCDMA competes with WCDMA, which prevails in Europe, as well as CDMA 2000, which is popular in North America, Japan and the Republic of Korea.

 

Unlike WCDMA and CDMA 2000, TD-SCDMA has yet to be commercially deployed, as it is less mature than the other two standards.

 

But a slew of tests, pioneered by the Chinese Government, have proved "TD-SCDMA is fully capable of meeting operators' demands," said Maler.

 

"TD-SCDMA has made great achievements (in technology maturity) in the past two years. The prospects are quite positive. We see it as a very good alternative to 3G technologies."

 

The Chinese Government has held off 3G licensing in the past few yeas, which has given developers of TD-SCDMA more time to catch up.

 

Such efforts seem to have paid off. In the past few months, backers of the technology said the reliability of TD-SCDMA has significantly improved.

 

Currently, four major companies are developing TD-SCDMA network gears, including a joint venture between China's Datang Telecom and Alcatel Shanghai Bell (ASB), China's Potevio, TD Tech, as well as a tie-up between Ericsson and China's No 2 telecom equipment maker ZTE Corp.

 

In the last phase of network tests, TD Tech has "outperformed itself," indicated Maler.

 

"We believe we could deliver the best and most reliable TD-SCDMA network equipment to operators," he said.

 

The great momentum TD-SCDMA has gained in the past months has given backers great confidence. Some government officials and industry experts have forecast that TD-SCDMA will account for one third of the 3G market in China, which could unleash network equipment orders worth about US$30 billion, according to some industry estimates.

 

Rumours have been swirling that China Mobile, the world's largest cellular operator by subscribers, may be awarded a licence to build 3G networks based on TD-SCDMA. Licences based on the other two standards could be issued later, ensuring TD-SCDMA has a time advantage to grab a larger 3G market share.

 

That could bode well for companies like TD Tech, which have been investing huge money in research and development (R&D) activities related to TD-SCDMA.

 

Increasing marketing and service capability could help TD Tech grab an upper hand in the competition, noted Maler.

 

"I hope TD-SCDMA will grab more than one third of the 3G market," he said, adding that the government and backers need to help TD-SCDMA secure a market share in China that is enough to make a significant dent in the global market in the future.

 

"In the long term, I believe TD-SCDMA will play a very important role in the global telecom industry," he said.

 

The CEO added that the merger of the networks of Nokia and Siemens will not affect the business of TD Tech. Nokia and Siemens have agreed to combine their network businesses. The new entity, called Nokia-Siemens Networks, is scheduled to be operational on January 1.

 

Nokia also earlier agreed to form a joint venture with Potevio, formally known as China Putian Corp, to jointly develop TD-SCDMA technologies. The joint venture has yet to secure final approval from the Chinese Government. The forming of Nokia-Siemens Networks could add uncertainties to the joint venture, which is also competing with TD Tech.

 

(China Daily December 4, 2006)