TD-SCDMA will have far-reaching impact on Chinese telecoms CAPEX

Chen Haofei, Secretary-General of TD-SCDMA Forum, attended the recent Sixth International Mobile Communication Industry Forum. He was invited to speak during the 3G Venture Capital Investment session of the Forum. His views on the potential influence of TD on Chinese telecoms are summarised here...

Taking the opportunity of being invited to address the recent Sixth International Mobile Communication Industry Forum, Chen Haofei, Secretary-General of TD-SCDMA Forum, explained his views on the effect of TD development on the economic fortunes of China's telecoms sector.

In his speech, Dr Chen declared: "The development and arrangement of TD-SCDMA will impact directly on the competitive landscape in the telecom industry and on the development of the domestic value chain. At the same time, changes in the industry landscape will also influence, either positively or negatively, the development of TD-SCDMA."

China Mobile is now inviting equipment providers to bid for its TD-SCDMA procurement. The network deployment in ten cities will further foster the maturity of the value chain of the TD industry. China Mobile's first round of investment in TD-SCDMA is substantial. TD construction should be extended and deepened in stages; network construction in ten provinces will accelerate the healthy development of the value chain and avoid cut-throat competition or repeated investment in the 3G era. Dr Chen also added: "TD-SCDMA needs an environment with as little distraction as possible. During China Mobile's recent GSM-capacity expansion, domestic vendors ZTE and Huawei grabbed over 90% of the total. This would not be happening if China had adopted 3G years ago. The evolution speed significantly impacts the development of the domestic value chain. Nearly all sectors in the TD industry supply-chain are now dominated by domestic enterprises, which will benefit from the first-round TD procurement."

When talking about the investment opportunities TD brought to the relevant value chain, Dr Chen was able to comment that: "TD brings opportunities to investors. Although it will be difficult for foreign investors to invest in TD by themselves as domestic telecom organisations need capital injections, joint ventures could be the most realistic solution for both sides. Strategic investors and other types of international partnership also have larger potential in this field."

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