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The People’s Insurance Company (Group) of China, or PICC, has agreed to invest RMB1.5 billion (US$202 million) in Datang Mobile, a major developer of China’s 3G mobile phone technology.

The investment will finance the development of the long-awaited home-grown 3G technology TD-SCDMA (time division synchronous code division multiple access), and therefore hasten 3G licenses in China. This is the biggest single investment by a Chinese insurance firm in telecommunications.

Wu Yan, PICC’s president, said, ‘It is an agreement between two giants and it will boost the development of the Chinese telecommunications industry and lead to further innovation.’

But will it happen? Will the home-grown TD-SCDMA become the 3G standard for China, and hopefully other countries, in the future. Some of the comments made were not overly encouraging.

Sandy Shen, a Gartner analyst based in Shanghai, said, ‘TD-SCDMA is the last straw for Datang Group, otherwise it is over. It is an uncertain risk for strategic investors as it will probably take a long time for them to get returns.’

For reasons which are probably concerned with letting the home technology have first bite at the market China has not released the timetable for issuing licenses and Sandy Shen said it will also take one or two years for a new 3G network to make a profit.

A good bet is that this standard will be announced officially around April next year. This, in truth, will not be in time for the 2008 Olympics. Yes, it will be available in certain cities by that time. Yes, there will be handsets that can deal with it. But a full-blown coverage of the Olympics with access China-wide now looks totally improbable.
Source: China.org.cn

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