China to launch homegrown 3G by 2005

China's first 3G mobile phone that uses the China-developed communication standard will move from the labs to commercial sales, with production expected in 2005.

The Chongqing Institute of Posts and Telecommunications, the 3G cell phone developer signed a letter of intent this Sunday with China Putian Corp, China's biggest telecom equipment supplier, reported Xinhua news agency.

Their joint production base in southwest China will produce an initial batch of 3G cell phones in early 2004 for network experiments. There is already an experimental network already in operation in Jiangbei District, Chongqing, southwest China, set up by Datang, another Chinese telecommunications corporation.

The new mobile phone was developed independently in China with local patents. It uses the China-developed data standard, TD-SCDMA (time division-synchronous CDMA). China hopes to commercially use the TD-SCDMA standard, competeing with the European standard WCDMA (wideband code division access) and the American CDMA2000 (code division multiple access) standard.

3G phones are widely seen as the next level for mobile telecommunications. Given the size of China's market at 221 million users currently and growing by 4 million new subscribers a month, making it the world's largest single cellular market, 3G phones in China hold much promise.

The TD-SCDMA is viewed more skeptically as it loses connection in moving cars and has uneven cell-to-cell handover. None of China's mobile and fixed line operators plan to use TD-SCDMA as their primary network protocol yet, according to analysts Norson Telecom Consulting.