China's home-grown standard for third generation (3G) wireless communications - TD-SCDMA - will be ready for deployment in mid-2005, a senior government official said Tuesday.

The technology's readiness will help decide when 3G licences will be handed out in China, which has more than 300 million cellular subscribers.

"I'm fully confident that a complete product lineup of TD-SCDMA will be ready for commercial use by next June," said Zhang Qi, director-general of the Ministry of Information Industry's Department of Electronics and Information Product Administration.

"Operators' deployment of (3G) networks will not be delayed."

Zhang made the remarks while representing the Ministry of Information Industry's deputy chief Lou Qinjian at a MOU (memorandum of understanding) signing ceremony between Canadian communications giant Nortel Networks and China's leading telecom manufacturer Putian Corp.

The two firms pledged to launch a joint venture to research, develop and manufacture 3G equipment based on TD-SCDMA and the Europe-initiated WCDMA standard.

A third standard, CDMA 2000, is backed by the US.

Details of the planned joint venture are not yet available.

Zhang told China Daily that domestic manufacturers will launch at least five mobile phones based on TD-SCDMA "within five to six months."

The makers include Lenovo, Ningbo Bird, Hisense and Amoisonic.

TD-SCDMA's core chips which are available for commercial use will be unveiled next month, Zhang revealed.

Major progress is also being made in the development of base stations and intelligent antennae based on TD-SCDMA, which are crucial to the commercial readiness of the standard, she added.

Industry professionals believe that China will not issue 3G licences until the relatively new TD-SCDMA technology matures and mobile phones are available.

Besides, government officials are taking a "wait-and-see" attitude towards the progress of 3G technology globally.

3G technology, especially WCDMA (also called UMTS) has experienced slow subscriber growth, and poor inter-operability and handset performance.

Edward Yu, president of Analysys Consulting, said Zhang's remarks may be a sign that the government will not award operators with 3G licences within a year.

China Mobile's indication that it is ready to adopt a 2.75G EDGE technology may also be a sign that 3G licensing will not happen soon, he said.

However, Michael W. Thelander, founder of the US-based Signals Research Group, disagreed.

The Chinese Government will award the licences sooner rather than later and licensing is still entirely achievable in 2004, Thelander said.

"Our optimism stems from a growing realization that China wants to be at the forefront of modern telecommunications and that it can only achieve that goal if it becomes involved in 3G instead of watching it from the sidelines," he said.

"With European operators now moving forward with their 3G launches and with reports of some modest success as of late, followed by our expectation for a very strong performance in the second half of this year, we believe China will finally realize that UMTS is ready for prime time, or at least close enough."

The Chinese Government wants to receive some sort of favorable treatment with respect to TD-SCDMA intellectual property rights and 3G royalties before it takes the next step forward, he said.

TD-SCDMA could earn billions of US dollars for its developer and Chinese telecom equipment makers if it is adopted widely, as most of the intellectual property rights of the two other standards are held by foreign firms.

(China Daily June 23, 2004)