China 3G launch – cheers or jeers?

With the world’s spotlight set to shine on China as the Olympics draws near, the country is trying hard to deliver on its promise of making available third-generation (3G) mobile services by next month.

But how exactly this will be a boon to phone users remains a question mark, industry watchers say.

In late April, the Chinese authorities announced that they would distribute 15,000 3G handsets to the Beijing Organizing Committee. This would allow the Games officials, staff and volunteers to watch televised programmes, play videos and surf the Internet over high-speed data transmissions on the cell phone.

But there is still no indication or announcement pertaining to how foreign visitors could easily access 3G during the Games, according to an industry source.

Beijing has been gearing up to create its Time Division-Synchronous Code Division Multiple Access, or TD-SCDMA, standard since 2001 in an attempt to create opportunities for its telecommunications firms. This is also to avoid coughing up huge licensing fees for developers of the other two more popular 3G standards – Wideband Code Division Multiple Access, or WCDMA, and CDMA-2000 – which have been approved by China for use in the mainland.

On April 1, China finally launched its first commercial 3G trial across eight cities, including Beijing, Shanghai, Guangzhou and Shenzhen – despite the launch coming five years later than other advanced markets.

China Mobile, the country’s largest cell phone operator which introduced the service, made available only 60,000 3G handsets – one-third were allocated for a select group of users to experiment on a complimentary basis, plus an 800 yuan (RM360) subsidy per user every month.

The remaining handsets were sold on the market at between 2,000 yuan and 4,000 yuan. Only six phone models and two types of data card for laptop users were available.

“China Mobile isn’t too ambitious in pushing the service on the mass scale. Subsidy for the 3G phones is not much, and these phones are pricey to acquire,” said Fang Meiqin, principal analyst with research firm BDA China.

Technical glitches such as poor signal coverage during the commercial trial are also a turn-off.

“There were lags and mosaics in the video calls... even audio calls were cut off during conversations,” Fang said, describing her experience testing the phones.

To attract more users to sign up for the novel service, she suggested dual-network handsets to allow users a quick switch from 3G to 2G if the former signal is weak.

“The launch certainly encountered some hiccups – the same situation other operators encountered when they started promoting their respective 3G services,” Fang said, adding that it will take at least two years for 3G to gain ground in China.

Following the selected eight Chinese cities, more 3G work is expected next year to deploy base stations for another 300 cities across the mainland.

Fast facts on China handset market

• Total users: 565.2 million (more than the US population of 303 million)

• China Mobile subscribers: 392.1 million

• China Mobile users’ average monthly phone bill: 82 yuan

• China Unicom subscribers: 167 million

• China Unicom users’ average monthly phone bill: 43.3 yuan

* Figures as at first quarter of this year