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Wireless Broadband in China

for GIGA Technology Program Mikael Leinonen, Finpro Hong Kong

November 30, 2005

Table of Content
1. 2. 3. Introduction Market overview 1. Business volume 2. Network Operators Services 1. VAS Figures 2. SMS & MMS 3. Ring Back Tones 4. M-Commerce 5. Games 6. Other services 7. Biggest Service Providers 8. Revenue sharing model Currently used Broadband technologies 1. 2.5G 2. EDGE 3. Wireless Local Loop 4. SCDMA 5. The Cuntong Project 6. WLAN 3G 1. General 2. Lisence issue 3. TD-SCDMA 4. 3G testing 5. HSDPA 6. Other future technologies 1. Wimax 2. WRAN 3. DVB-H 4. Beyond 3G, 4G Policy making and public sector’s role 1. CATR 2. Standard Association 3. CJK Standards meeting Public R&D programs 1. General 2. NFS 3. 863 4. FuTURE 5. Notable research institutes Private sector R&D activities 1. General 2. Network equipment manufacturers 3. Handset manufacturers Foreseeable radical changes Finnish Companies’ possibilities in China






6. 7.

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry


1. Introduction

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry


11.1. • This report discusses the following issues • • • • • Overview of the China wireless broadband market Competitive environment Technology adoption and outlook Available services Government’s role in the development of the wireless broadband • Public & Private R&D activities for wireless broadband technologies • Opportunities for Finnish companies Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry /4 . Introduction • This report has been written for the GIGA program of Tekes. The report provides information on the China wireless broadband markets. focusing on converging networks. billion (Finland 5.8%.2%. Introduction China in a Nutshell China National Statistics 2004 Population Land Area Largest City GDP per capita Metropolitan Population 1.) urban population: 41.600 (2004 Source: www. rural population: 58.china.2005 / © Finpro ry /5 .11. CIA world factbook Wireless Broadband in China/ Leinonen/ 30.3 million) 9.600 000 km² (Finland 338.000 km²) Shanghai $5.

11. Market Overview 2.2005 / © Finpro ry /6 .1 Business Volume 2.2.2 Network operators Wireless Broadband in China/ Leinonen/ 30.

2% increase from 2003  ~43% of total telecom revenue Number of mobile phone users was 340 million by the End of 2004 ~25. Market Overview 2.11.9% user penetration by the end of 2004 Mobile penetration is estimated to double itself by 2010 M o b ile S u b s c r ib e r s & P e n e tr a t io n 400 300 Subscriber(Mil) 200 100 0 2001 2002 2003 2004 Year 30 25 20 15 10 5 0 Penetration % S u b s c rib e r P e n e t r a t io n • • • Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry /7 .1 General market information General market information • • Telecom revenue reached USD 63 bln in 2004 Mobile communications revenue:  USD 27 bln  13.2.

mobile • • • Number of mobile phone users surpassed the number of fixed line users at June 2004 Pure mobile operator China Mobile is the biggest in market share by revenue and subscribers Two fixed line operators Telecom and Netcom are now achieving more market share with “quasi” mobile PHS service Rai l com S & Chi na at N com et 1% 16% Chi na Uni com 15% M ket Share by Revenue ( 2004) ar Chi na Tel ecom 32% Chi naWireless Broadband in China/ Leinonen/ 30.1 General market information Market share: fixed vs.2005 / © Finpro ry /8 .11.2. Market Overview 2.

2.2005 / © Finpro ry /9 .11.1 General market information Number of mobile users per technology Mobile Users (Millions) per Operator & Technology 4Q/2004 Wireless Broadband in China/ Leinonen/ 30. Market Overview 2.

1 General market information Mobile subscribers Yearly comparison on new mobile user subscription 900 800 700 600 500 400 300 200 100 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Ministry of Information Industry Wireless Broadband in China/ Leinonen/ 30.11. Market Overview 2.2005 / © Finpro ry / 10 Thousand (subscribers) 2001 2002 2003 2004 .2.

1/H 2004 and 1/H 2005 (Y-axis: subscribers 10.11.2. Wealthy East-coast is leading in subscriber numbers Comparison of new mobile subscribers in East-. Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 11 .and Western China.9% (2004) Mobile phone density differs a lot in different areas. Central.000 ). 1/H 2003.1 General market information Geographically diversified penetration • • Penetration rate only ~25. Market Overview 2.

Market Overview 2.1 General market information New mobile users are mainly post paid customers • • In 2004 ~90% of the new mobile phone users were prepaid customers This has caused the decrease in operators’ ARPU Comparison of Fixed Line and Mobile communication ARPU in 2003-2005 (Monthly ARPU.11. RMB) [1 CNY = 0.2005 / © Finpro ry / 12 .2.123793 USD (11/05) ] Wireless Broadband in China/ Leinonen/ 30.

11.2 license! billion PHS in huge growth (US$ 19.1 General market information Mobile Operators Operator China Mobile China Unicom Network GSM since 1995.8 billion) PHS in huge growth China Netcom (No mobile license. Market Overview 2. but operates PHS) PHS (LittleSmart) since PHS: 20.244 billion) RMB 79.4 billion (US$ 23.47 mln CDMA2000 1X since late 2003 PHS (LittleSmart) since PHS: 39. CDMA 30.76 mln cdmaOne since 2002.2.12 mln 1997 China Telecom (No mobile license. GSM 88.08 mln 1997 Wireless Broadband in China/ Leinonen/ 30. GPRS since 2002 Users GSM: 223.4 billion) Total (including Fixed No mobile operating line): RMB 64.6 billion) Note Planning to launch EDGE in 2H/2005 GSM-CDMA dual mode service since 2H/2004 GSM since 1994.2005 / © Finpro ry / 13 .9 billion license! (US$ 7.33 billion (US$ 9. but operates PHS) Total (including Fixed No mobile operating line): RMB 161.78 mln Operating revenue 2004 RMB 192.

67 120. 1Q 05 vs.33 18 15 515 116.) of Revenue revenue/ (%) month China Mobile China Unicom 416.2 79.2005 / © Finpro ry / 14 . 2Q 05 China Mobile and China Unicom 2005 1/Q 2005 2/Q Yearly change (%) Data ARPU Data revenue/ Data Share of Data revenue/ Data Share Data month ($ milj. Oct 05 Wireless Broadband in China/ Leinonen/ 30.48 101.11.03 Source: Informa.67 21.1 General market information Mobile data revenues.52 85.2.4 14 110. Mobile Media Analyst. Market Overview 2.) Revenue (%) month ($ milj.

Motorola.1 General market information Handset market • 2004: 73 million handsets sold • 2005 (E): 88 million handsets sold (by CCID) • Over 1000 handset models in market • Nokia.2005 / © Finpro ry / 15 . Samsung and Bird are leading the market • Domestic manufactures have less than 45% of the total market Wireless Broadband in China/ Leinonen/ 30.11. Market Overview 2.2.

11.2005 / © Finpro ry / 16 . respectively. for transmission and reception. in the 900 MHz frequency band and the 1800 MHz frequency band in Mainland China.220 23. Source: China Mobile Wireless Broadband in China/ Leinonen/ 30.581 Cumulative net additions 850 22.070 Subscriber Base ( in thousands CM has the right to use a total of 34 MHz of spectrum. 2005 Contract subscriber Prepaid subscriber Total subscriber Subscriber number 60.362 Net additions 105 3.2.625 227. Market Overview 2.2 Network Operators China Mobile As of 31 July.737 166.476 3.

38 million 8.0 billion 226 million 86.91 million 11.02 $ 196.11.035 $ 174.09 million 40.2% 90.0% 85.035 $ 156.037 $ 147. Market Overview 2.621 Source: China Mobile Wireless Broadband in China/ Leinonen/ 30.48 billion 318 0.58 million 11.91 million 11.37 billion 297 0.29 million 9.1 billion 254 million 84.8 billion 244 million 83.87 million 9.771 204.127 194.2 Network Operators China Mobile insight: July 04 – March 05 As at 31 March 2005/ For the period from 1 January 2005 to 31 March 2005 As at 31 December 2004/ For the period from 1 October 2004 to 31 December 2004 As at 30 September 2004/ For the period from 1 July 2004 to 30 September 2004 Number of Subscribers * Net increase in subscribers * Average Revenue per User per Month (ARPU)(USD/User/Month) * Total Usage (Minutes) * Average Usage per User per Month (MOU) (Minutes/User/Month) * Average Revenue per Minute (USD) Number of Users of Mobile Data Services * Short Message Services Usage Volume (Messages) Network Capacity (Users) Network Utilisation Rate Number of Employees 213.00 million 59.2.27 billion 313 0.6% 88.83 million 62.14 $ 170.2005 / © Finpro ry / 17 .27 $ 188.

11. Established UNISK Information Technology (together with SK Telecom) to engage in wireless value added service business Uni-Java (developed with Qualcomm) and Brew are two application platforms for China Unicom Wireless Broadband in China/ Leinonen/ 30. Market Overview 2.2005 / © Finpro ry / 18 .2.2 Network Operators China Unicom • • • • • • The only operator in China to run two different networks of GSM and CDMA Testing on CDMA EV-DO & CDMA EV-DV as 3G (Tianjin and Shanghai has built EV-DO trail network) Speculation that China Unicom can be split up two Uni-Info. branded WAP portal.

• It CDMA targets more to Hi.& Mid-End users & business customers • “World Wind”. a branded service of dual-mode phone services enables users to transfer between GSM and CDMA network automatically • Placing increasing attention to mobile applications as service differentiation eg: Mobile Wallet Wireless Broadband in China/ Leinonen/ 30. handset subsidy & prepaid service.2 Network Operators China Unicom: strategies • Boosted CDMA users thru calling discount.11.2.2005 / © Finpro ry / 19 . Market Overview 2.

etc. Market Overview 2.11. • Focus on fixed line. WLL. broadband service.2 for revenue). China Telecom occupies 60% WLL market • Plan to obtain 3G license in the future China Netcom Overview • Third largest operators in China. etc • Main business area are north part of China • Occupy 40% WLL market share • Official partner of 2008 Olympic Games Wireless Broadband in China/ Leinonen/ 30. • Focus on fixed line.2005 / © Finpro ry / 20 . Its main business area is southern parts of China • China have 65.2. broadband service.2 million Wireless Local Loop (WLL) user at the end of 2004.2 Network Operators Fixed line operators China Telecom Overview • One of the biggest operators in China market (No.

11. broadcasting and related business Testing 3G Wireless Broadband in China/ Leinonen/ 30. etc. It devotes to develop satellite communication.2005 / © Finpro ry / 21 . broadband service. Its network cover whole country Launched GSM-R trial network in 2004 Testing 3G China Satcom • • • Established in 2001.2 Network Operators Fixed line operators China Railcom • • • • Its focus on fixed line.2. Market Overview 2. focus on satellite communication.

07 USD per minute.250 USD Monthly fee 3. sms XLT.370 USD 75 -370 USD 6.018 USD and 0.2 Network Operators Service fees Service WLL service GPRS Handsets 75 .04 USD per 1) kilobyte 2) 3) CDMA GSM 150 .05 USD Prepaid: 0. sms. e-net.11.15 USD/hour.05 USD 0.2005 / © Finpro ry / 22 .cellphone 0.19 USD 0.012 USD from Unicom to China Mobile. Elite Plan: 12 USD a month for 20MB.01 USD per message Basic Plan: no monthly fee.0012 USD for each additional kilobyte.004 USD per kilobyte.19 USD 6. Wireless Broadband in China/ Leinonen/ 30. and 0. Sms China Mobile network to Unicom is 0. usage is charged at 0.014 Value added services.4 USD a month for 1MB free data volume. Economy Plan: 2. 4) Business Plan: 24 USD a month for unlimited usage. call forwarding 0.09 USD Minute price 0. Market Overview 2. 250 USD or less 0-25 USD 0-0.2.

3 Ring Back Tones 3.7 Revenue Sharing model Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 23 .1 VAS figures 3.3.2 SMS & MMS 3.5 Games 3.11. Services 3.6 Other services 3.6 Biggest Service Providers 3.4 M-Commerce 3.

revenues are 2. user reach 22 million. expect to reach 60 million in 2005.1 VAS figures • Data services account roughly about 10% of operators’ revenue • Over 1000 Service Providers offering mobile VAS • Total market value of mobile VAS exceed 2 billion Euro in 2003 • VAS Market information at Q4 of 2004 • WAP user reach 14. revenue 33.11. Services 3.6 million Euros Wireless Broadband in China/ Leinonen/ 30.5 Euro • CRBT increase fast.3.2005 / © Finpro ry / 24 .5 million and 1 million Euro • IVR market revenue 24.9 million. revenue 104 million Euro • Java and Brew games are smoothly increasing.

11. • CM’s top 5 SPs capture 57% revenue from WAP SMS. revenue 31.3. followed by ringtones.98 million. LBS • Number of MMS users reached 6. Wireless Broadband in China/ Leinonen/ 30.1 million USD • MMS is billed at USD 0.2 SMS & MMS SMS: • 217 bln SMS sent in 2004. • Color messaging by CM • Color E by CU – MMS. pictures. Services 3. IMAP (emails). 2.69 bln USD of total revenue • 57% of SMS are for chat & games.096 each (SMS is USD 0. news.2005 / © Finpro ry / 25 . financial info. • Revenue from SMS is leveling off MMS: • Both operators started MMS with branded content.) • Users also need to pay for MMS content downloaded from Internet portals.012 each.

USD 0.25/download.2005 / © Finpro ry / 26 . ringback tone provided by WiseSpot’s WiseRing personalized VAS platform built on NMS Communications technology.11. • CU’s ringtone@Yamaha offers a vast choice of different melodies for handset ringers. Services 3.3.3 Ring Back Tone Ring back tone – the next big hit? Color Ring Back tones: • CM’s “Color Ring”. • Avg price: USD 0. • Special effect ringtones account 40% of downloads.8/month fee Wireless Broadband in China/ Leinonen/ 30.

money transfer via mobile phone Wireless Broadband in China/ Leinonen/ 30. a/c transfer. transfer a/c.11. IVR.3. WAP subscribers operate on bank accounts to purchase. Services 3. inquiry balance by SMS • Will expand to shopping. • CU’s Mobile Wallet Service • Cooperation with China Construction Bank • Online payment.2005 / © Finpro ry / 27 . online payment.4 M-Commerce M-Commerce: • CM’s Handset Purse • Through SMS. etc. security deal.

• Role play & action games most popular.5 Games Mobile Games: • China is 2nd largest market in APAC. 150% growth from 2003 • Estimation for 2005: $177.2005 / © Finpro ry / 28 . Services 3.11. few Finnish already in market • Price: 0. majority of revenue comes from offline mobile games • Increasing Java and Brew support in mobile handsets is boosting the game market • Mobile games are mostly from Japan & Korea.5-1 USD/download Java Game Wireless Broadband in China/ Leinonen/ 30.5 million • Currently. • Mobile gaming market topped USD $98 million.3.

2005 / © Finpro ry / 29 .11. Services 3.6 Other services • Mobile email service has not yet been launched in China • Market of the vertical market applications (professional use) is still in initials • Location Based Services have certain restrictions • Use of VoIP has been banned by China Telecom Wireless Broadband in China/ Leinonen/ 30.3.

Tom.3. Services 3. Nihon. Magus. Sohu. NewPalm Kongzhong. 5wan. BJ Mig Tencent Sina TOM Linktone Sohu • • WAP Mobile Games Java Mobile Games Top 5 SP of WAP (China Mobile) • • • • • Kongzhong TOM Nihon Enterprise GoodFeel (Sohu) Xuntian Top 5 SP of SMS • • • • • Wireless Broadband in China/ Leinonen/ 30. Sina. Mobile Shenzhen Xuntian.2005 / © Finpro ry / 30 .11. Any8. Shanda’s Digital Red.7 Biggest Service Providers Top Service Providers in 2004 Top 5 SP of Games • SMS Mobile Games • • • • Top 5 Sp of IVR • • • • • TOM Mtone Linktone Sina Tencent Linktone. Mtone. Tencent Kongzhong.

year • Net income: $5.6 million.5G services revenues: $8.7% year-overyear • Software and system integration services revenues: $1. growth of 34.5G market due to WAP billing policy changes by China Mobile and slow CDMA user growth experienced by China Unicom Wireless Broadband in China/ Leinonen/ 30. growth of 16. (Nasdaq: HRAY .1% year-over-year • 2. growth of 21..8 million.3. is one of the leading providers of advanced wireless value-added services and mobile telecommunication network software in the People's Republic of China Financial results for the second quarter ended June 30.7 Biggest Service Providers Example of mobile VAS Service Provider – Hurray! Group • Hurray! Holding Co. Services 3.0 million. growth of 28.1% year-over. .7% year-overyear • 2G services revenues: $4.News).0 million.6 million.2005 / © Finpro ry / 31 • • Source: Hurray! Holding Co. growth of 25. Ltd.0% year-over-year In 2/Q 2005 short-term weakness in the 2. 2005: • Total revenues: $15. Ltd..11.

30:70 Operator will cooperate with SP for marketing for some good service 3.2005 / © Finpro ry / 32 .3.8 Revenue sharing model General revenue sharing model: • Revenue sharing model depends on nature of cooperation between operator and SP. marketing and support • Operators are gaining greater control over SPs • Good for some small SPs if they have attracting services and applications.11. Wireless Broadband in China/ Leinonen/ 30. some times depend on negotiation • Recent changes in the model • China Mobile plans to use 3 different revenue share models with SPs in the future 1. Services 3. Operator will help them to do marketing. 15:85 SPs will be responsible marketing 2. 50:50 Operator will be responsible for Sales. SPs and CPs • Revenue sharing model is typically 15-20(operator):80-85(service provider) • Normally revenue sharing model between SP and CP is 50:50.

2005 / © Finpro ry / 33 . Currently used technologies 4.6 WLAN Wireless Broadband in China/ Leinonen/ 30.2 EDGE 4.5G 4.5 The Cuntong Project 4.1 2.3 Wireless Local Loop SCDMA 4.

2005 / © Finpro ry / 34 . Currently used technologies 4.5G 2.4.711 million subscribers in 2004 • Speed around 50-90 kbps • Fixed line operators China Telecom and China Netcom started at 1997.11.1 2. became very popular after 2002 • Internet connection with (theoretical) 32/64 Kbps (minimal use) • CDMA2000 1X • Wireless Local Loop access service Wireless Broadband in China/ Leinonen/ 30.5G as mobile broadband • GPRS • China Mobile started in 2002 • Covers 160 biggest cities (roaming in 73 countries) • Speed around 40 Kbps • China Unicom started at late 2003 • 8.

1 2.4. Currently used technologies 4.5G China Mobile GPRS data card • Starting on July 2004 China Mobile subscribers have had opportunity to use GPRS data adapter for laptop internet access • Service is called “Moving Wing” • China Mobile provides the service with Legend’s data card • Available in 160 cities • Mainly in business use Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 35 .

11. • Service is available with Sierra Wireless AirCard 775 wireless wide area network card Wireless Broadband in China/ Leinonen/ 30.4. Currently used technologies 4. to better compete with the high data rates of China Unicom’s CDMA2000 1x network • China Mobile Guangdong branch has newly launched EDGE network in Guangdong province.2005 / © Finpro ry / 36 .2 EDGE EDGE • China Mobile is deploying EDGE in some selected areas. servicing more than 18 million potential customers in cities throughout the Guangdong province.

50 mln as of the end of June 2004) Estimated to reach 100 million users by the end of 2005 PHS Internet access (32/64Kbps) costs about USD 15 cents an hour Average PHS handset price of USD 60 LittleSmart also offers some simple mobile VAS and Internet access with the speed of 64 Kbps WLL users are mainly low-end customers and use for internet access is minimal However. industry experts believe that China Netcom and China Telecom can gradually shift their large WLL customer base into 3G. Currently used technologies 4.4.3 Wireless Local Loop Wireless Local Loop • • • • • • Two fixed line operators China Telecom & China Netcom are operating “quasi” mobile Wireless Local Loop (WLL) service It offers limited mobility within one metropolitan area The cheap price of WLL service has created price war and is decreasing mobile operators’ (CM & CU) ARPU There are two main technologies used for WLL: • PHS.2005 / © Finpro ry / 37 . so it might have heavy impact on the coming 3G competition Wireless Broadband in China/ Leinonen/ 30. known as Village Wireless Communication (or Da Ling Tong) PHS is mainly used for cities and SCDMA for rural areas SCDMA is gaining market share from PHS • • • • • • • August 2005: over 81 million WLL users (55. known as LittleSmart (or Xiao Ling Tong) • SCDMA.11.

Jinpeng. in cooperation with Datang.4. but the next evolution version of SCDMA will have a possibility to offer wireless broadband access Government has formed a high-level working group to investigate SCDMA possibilities as an choice for wireless broadband access Wireless Broadband in China/ Leinonen/ 30. Currently used technologies 4. is a Chinese home-grown wireless access technology The main developer is Beijing Xinwei Telecom Technology. Lenovo.2005 / © Finpro ry / 38 . Amoi. Konka. Skyworth. Hisense. or Synchronous Code Division Multiple Access. Zhenhua.11. etc. Putian Lingyun. SCDMA Alliance between domestic manufacturers was established in August 2004 (MII) has designated the 23 megahertz frequency specially for the system Currently the technology is deployed in 106 cities of 16 provinces across China Currently SCDMA WLL (wireless local loop) networks have no broadband service. TCL.4 SCDMA SCDMA • • • • • • • SCDMA.

000 villages have been connected so far.7%) SCDMA is being adopted by major telecom operators realizing the Cuntong project Cuntong project gives SCDMA great market prospects Wireless Broadband in China/ Leinonen/ 30.357 newlyconnected last year still more than 50.2005 / © Finpro ry / 39 .4. with 9.5 The Cuntong Project The Cuntong project • • • • • • • • • MII launched the "Cuntong" project in 2004 Project aims to speed up telecommunications availability in central and western China and rural areas to ensure balanced development The Chinese government is aiming to connect 95 per cent of villages to universal telecom services by the end of 2005 The country's six major telecom operators are all participating in the program Total of 628.11.000 villages in China which remain unconnected Teledensity in the rural areas is only 13 percent (compared to the whole China average of 23. Currently used technolgies 4.

but expected to boom in next 5 years Some private companies use wireless LANs. but universities are still the biggest user group Only few domestic vendors. Biggest equipment developers are ZTE and Huawei.800 hotspots in China There are about 120. South-East Uni) Wireless Broadband in China/ Leinonen/ 30. business centers and media organizations and other public venues About 80% are individual users 20% business users By the end of 2004.6 WLAN WLAN • • • • • • • • Started in 2001.4. Currently used technologies 4. Netcom and China Mobile Equipment market size about $54 million in 2004 • • • • Estimated to reach $160 million by 2008 (In-Stat: China's WLAN Market Analysis and Forecast 2003-2008) Mainly in upscale hotels.11. with joint research with some universities (SZPKU.000 registered WLAN customers According to some estimations. Tsinghua Uni. there were about 1. the user penetration in urban areas is below 5% Market is still in beginning.2005 / © Finpro ry / 40 . Large-scale deployment in 2002 by China Telecom.

Currently used technologies 4.11-2003 • similar to IEEE 802. China announced to delay WAPI requirements in April 2004 WAPI is still unlikely to completely disappear.4. Foreign companies would need to coproduct their equipments with Chinese manufacturers Due to strong opposition from foreign countries (especially USA). but uses different security protocol • WAPI (WLAN Authentication and Privacy Infrastructure) Original deadline for vendors to sell only WAPI based equipments was June 2004 To support WAPI.11. since number of manufacturers have already licensed it Wireless Broadband in China/ Leinonen/ 30.6 WLAN WLAN • • • • • • China has developed own WLAN standard (came to effect in Dec 2003) Standard is called GB15629.11.2005 / © Finpro ry / 41 .

5 HSDPA Wireless Broadband in China/ Leinonen/ 30.11. Third Generation mobile 5.4 3G testing 5.5.3 TD-SCDMA 5.2 License issue 5.1 General 5.2005 / © Finpro ry / 42 .

5. Third Generation Mobile 5.1 General

• China has not yet adopted 3G • 3G license decision is still open • Licenses are estimated to be granted during the 1/H of 2006 • Final decisions on 3G licenses are to be made in very high political level; probably above the telecom regulator Ministry of Information Industry (MII) • Possibly all 3 standards will be adopted

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 43

5. Third Generation Mobile 5.1 General

• Government is revealing very limited information about licenses in beforehand • Currently there is no official & reliable information available about the timetable or operator requirements • MII has already run several 3G tests to compare different technologies

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 44

5. Third Generation Mobile 5.1 General

• China has developed her own 3G standard, TDSCDMA (see chapter 5.3) • A total of 155 MHz spectrum has been scheduled for TD-SCDMA • Country is big enough to support own standard. Goal is to keep the invested money (infrastructure, R&D) in China. • Mainly due to political reasons country will most likely also adopt CDMA2000 and WCDMA

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 45

but that will take time Wireless Broadband in China/ Leinonen/ 30. whole industry is waiting • WTO membership should open doors for foreign operators.2 License issue 3G licenses • There will be no license auction • China Mobile favors WCDMA • China Unicom is already testing CDMA2000 EV-DV and EV-DO • Fixed line operators China Telecom and China Netcom are also likely to get 3G license • Smaller fixed line operators China Satcom and China Railcom will also get the license? • Lot of guesswork about licenses. Third Generation Mobile / © Finpro ry / 46 .

3 TD-SCDMA TD-SCDMA development • Datang Telecommunication technology (former China Academy of Telecommunication Technology) is the most active TD-SCDMA developer The biggest manufacturers have formed number of Joint Ventures for TD-SCDMA R&D The Chinese Government has already invested more than 1 billion (US$123.3 million) in the research and development (R&D) of TD-SCDMA Domestic companies have got heavy public subsidies for TDSCDMA development TD-SCDMA developer pool • • • Wireless Broadband in China/ Leinonen/ 30. Third Generation Mobile / © Finpro ry / 47 .

11. Third Generation Mobile 5. suitable for Internet traffic Use of Smart Antenna technology Good mobility: > 120 km/h Large cells.5. Only few TD-SCDMA chips available Lack of equipments and handsets. No mass production. with diameter up to 40 km Cons: • Standard development far behind rivals. belongs to 3GPP TDD technology. Standard is very immature. fully compatible with GSM and GPRS Easy to upgrade from existing infrastructure Efficient use of spectrum Effective data transmission.3 TD-SCDMA TD-SCDMA Pros: • • • • • ITU standard. no commercial use so far No large scale support from industry.2005 / © Finpro ry / 48 . No uniform platform for applications -> No application developer “pool” Some unsolved technical problems: • • • • • Cell interference large cell area functions high speed mobility poor stability of existing IC’s Power consumption of handsets • • • • • • • Wireless Broadband in China/ Leinonen/ 30. Asynchronous uplink – downlink.

Huawei. Third Generation Mobile 5. Datang.2005 / © Finpro ry / 49 .11. Nortel and Siemens • More than 420 members • 16 Board Members • 18 Senior Members • 390 ordinary members Wireless Broadband in China/ Leinonen/ 30. China Unicom.5. China Telecom.3 TD-SCDMA TD-SCDMA forum • Industry consortium devoted to develop and support TD-SCDMA technology • Established in Dec/2000 by China Mobile. Motorola. Wireless Broadband in China/ Leinonen/ 30. China Electronics Corporation. Third Generation Mobile 5. Main goals are: • • • to highly promote the TD-SCDMA industrialization process to integrate and coordinate the industry resources to lead the enterprises successfully into the third generation mobile communication market • • Source: http://www. including: UTStarcom... Ltd. and Beijing Zhong Chuang Telecom Test Co.. Tongyu Communication Equipment Co. and China Pu Tian Corporation Now 21 members. Huawei Technologies Co.3 TD-SCDMA TD-SCDMA Industry Alliance • Formed in October 2002 by: Datang Telecom Technology and Industry Group).... Holley Group Co.. Ltd. Hubei Zhongyou Technology Industry & Commerce Co.. Guangzhou Soutec (Group) Technology Co.2005 / © Finpro ry / 50 ... Legend (Beijing) Ltd.11. Shanghai DBTEL. Ltd. Alcatel Shanghai Bell.5.. Ltd. Ltd. Ltd.tdscdma-alliance. Beijing Envada Electric Power Engineering Technology Co. ZTE Corporation.

Wireless Broadband in China/ Leinonen/ 30. Third Generation Mobile 5. All the field tests have been conducted and ran by CATR under the name of MTnet. More than 20 models of user terminals have gone through the test and results showed TD-SCDMA to be ready for commercialization TD-SCDMA application level testing is still on-going in MTnet. Core network and RAN) with all 3 standards was ran at 2001/6 to 2003/8 • Results showed that TD-SCDMA was still too immature for commercial use • Initial tests for WCDMA and CDMA2000 have been conducted already several years earlier The special test for TD-SCDMA was arranged during May and June 2005 and completed successfully.4 3G Testing 3G testing • • • • • • • China Academy of Telecom Research (CATR) is running the 3G testing 3G test has been ran in two phases: 1) Laboratory testing in CATR test lab and 2) field test with all 6 national telecom operators CATR 3G test laboratory in Beijing is called MTnet.2005 / © Finpro ry / 51 . MII has Invested almost 25 Million USD on CATR testing facilities First test (phase I & II.11.5.

high-speed mobility and cell interference • Only one terminal (by Datang) was available for the phase1 field test Wireless Broadband in China/ Leinonen/ 30.11.5. Third Generation Mobile 5.2005 / © Finpro ry / 52 .4 3G Testing Operators’ TD-SCDMA trial networks under the MTnet Beijing Shanghai China Telecom China Netcom China Mobile China Unicom China Railcom China Satcom China Railcom China Mobile ChongQing Chengdu • Problems with terminals.

.4 3G Testing Operators’ WCDMA trial networks under the MTnet with network supplier information Network Equipment Manufacturer Huawei ZTE Siemens Nokia Ericsson Nortel Alcatel Motorola UT Starcom Lucent Guangzhou Post & Telecom Equipment Co. Ltd Eastcom China Railcom (10) Wireless Broadband in China/ Leinonen/ 30.5. Third Generation Mobile 5.11.2005 / © Finpro ry / 53 Beijing Shanghai Guangzhou China Mobile (20) China Railcom (20) China Unicom (10) China Netcom (10) China Telecom (10) China Telecom (20) China Mobile (20) China Netcom (10) China Mobile (10) China Netcom (10) China Telcom (10) China Mobile (10) China Netcom (10) China Netcom China Telecom (10) .

11.2005 / © Finpro ry / 54 .4 3G Testing Operators’ CDMA2000 (EV-DO) trial networks under the MTnet with network supplier information Network Equipment Manufacturer Huawei ZTE Ericsson Nortel Samsung Lucent Motorola Putian Capitel Dalian LinkAir Operators in Beijing Operators in Shanghai Operators in Guangzhou China Unicom (20) China Satcom (10) China Mobile (10) China Netcom (10) China Telcom (10) China Mobile (10) China Netcom (10) China Satcom (5) China Unicom (10) Wireless Broadband in China/ Leinonen/ 30.5. Third Generation Mobile 5.

11.5G • • • • • • • • • Since China has been delaying 3G licenses so long.8Mbps) in the 2/Q 2006 Wireless Broadband in China/ Leinonen/ 30. data support up to 2.5 HSDPA 3. there will already be commercial HSDPA solutions available by the time Chinese operators start to build up their 3G networks Operators will have change to jump directly to HSDPA in some selected areas Huawei and ZTE have announced to launch commercial HSDPA solution in 2006 NEC and Samsung will launch HSDPA handsets early 2006 China Mobile will conduct HSDPA trials in Beijing in Dec 2005 with various vendors Datang Mobile has announced to launch a single carrier HSDPA solution for TD-SCDMA in the 1/Q 2006 Datang Mobile has partnered up with Alcatel Shanghai Bell to develop HSDPA solutions for TD-SCDMA TD-Tech (Siemens—Huawei JV) has plans to launch commercial TDSCDMA/HSDPA products in the 1/Q 2006 T3G Technology (Datang-Phillips JV) will release the TDSCDMA/HSDPA chipset and system solution (single carrier. Third Generation Mobile 5.5.2005 / © Finpro ry / 55 .

1 Wimax WRAN 6.2005 / © Finpro ry / 56 . Other future technologies 6.3 DVB-H 6.4 Beyond 3G & 4G Wireless Broadband in China/ Leinonen/ 30.

ZTE and Huawei.11. However. Other future technologies 6.1 Wimax Wimax • • • • • • Wimax has lot of potential in China.2005 / © Finpro ry / 57 . since the fixed line network penetration is still rather small Government sees 3G and Wimax as complementary technologies and they have different demand on market.6. so far there is no clear action from government about Wimax Biggest Chinese networks equipment manufacturers. there will be a need for a Chinese version of Wimax. Research for “Chinese Wimax” has just started recently and government has not yet given any official deadlines for forming the standard. are both very active on Wimax Other active Wimax players in China are Intel and Alcatel Shanghai Belling Many of the current research projects are focused on the interoperability of WLAN and Wimax As a result from TD-SCDMA project and FuTURE project. ZTE. Some research institutes and companies (such as Wireless Core. Huawei) already have activities about this. Government is forming the responsible body to run the research Wireless Broadband in China/ Leinonen/ 30.

11.2005 / © Finpro ry / 58 . Other future technologies 6.1 Wimax • • • • • The Wireless Technology Innovation Institute of Beijing University of Post and Telecommunication (WTI-BUPT) is one of the most active research institutes studying Wimax in China WTI-BUPT has WiMAX Partnership Agreement with Picochip (UK) WTI-BUPT will use picoChip's WiMAX reference designs and PC102 processor within its research programmes Two parties will work together to develop commercial WiMAX systems optimised for the special needs of the Chinese market picoChip has also signed a cooperation agreement with the Institute of Computing Technology (ICT) of the Chinese Academy of Sciences (CAS) to collaborate on the acceleration of WiMAX in China Wireless Broadband in China/ Leinonen/ 30.6.

22) • A Wireless Regional Area Network (WRAN) system based on 802. but being similar to Wimax it has lot of potential market in China • • • Wireless Broadband in China/ Leinonen/ 30. small businesses.22 protocols is intended to make use. of unused TV broadcast channels to address. A secondary objective is to have this system scale to serve denser population areas where spectrum is available. rural and remote areas and low population density underserved markets with performance levels similar to those of broadband access technologies such as digital subscriber line (xDSL) technologies and Digital Cable modem service. Other future technologies 6. The WRAN system must be capable of supporting a mix of data.2005 / © Finpro ry / 59 . voice and audio/video applications. So far very few Chinese companies involved. The target markets to be addressed by the 802.. on a non-interfering basis. as a primary objective.2 WRAN WRAN (IEEE 802. multi-tenant buildings and public and private campuses. SOHO.11.6. multi-dwelling units.22 protocols in WRAN networks are single family residential.

2005 / © Finpro ry / 60 . Other future technologies 6. Tsinghua University is strongest among them Wireless Broadband in China/ Leinonen/ 30.6.3 DVB-H Mobile TV • Currently the coming 3G is the big topic and mobile television is not widely discussed yet • Still no government decision about used standard so far (could also be DVB-H) • JV company of Shanghai SMG and 东方明珠 has recently begun the DMB Mobile TV trial in Shanghai • China is also developing own standard for mobile television • Several parties have propositions for standard.11.

with distances up to 10-20 meters In longer range transmitting UWB’s signal becomes too weak Chinese government has no official plans about UWB.11.4 UWB UWB • • • • • UWB technology is most suitable for short range transmission.6. but China Academy of Telecom Research (CATR) has some small scale UWB research going on for consultancy purpose to support government’s spectrum investigations In 2004 NSF (Natural Science Fund) has published UWB research fund (1.2005 / © Finpro ry / 61 .8 million Yuan) for public bidding as one of the key programs of the NSF Department of Information Sciences Wireless Broadband in China/ Leinonen/ 30. Other future technologies 6.

2005 / © Finpro ry / 62 . 4G B3G – 4G • Currently Chinese research institutes are talking about B3G.11.6. Other future technologies 6. not 4G • There are basically two branches of B3G research: • Datang Mobile’s Beyond TD-SCDMA • B3G research under the FuTURE project • B3G research in FuTURE Project will be discussed more in details in chapter 8.5 B3G.3 Wireless Broadband in China/ Leinonen/ 30.

Smart Antennas.2005 / © Finpro ry / 63 .6. for long future of TDD Wireless Broadband in China/ Leinonen/ 30. Adaptive Array.5 B3G. 4G Datang Mobile – Beyond TD-SCDMA • Improvement of the existing technology • Joint Detection. Other future technologies 6. MIMO • HSDPA (& later HSUPA) • Long Term Evolution for TDD • Schemes proposed for LTE TDD • MC TD-SCDMA Smooth evolution. better Compatibility • LTE TDD OFDM Totally new solution.11.

5 B3G.6. Other future technologies 6. based on LCR MIMO. improving the cell-edge performance Multiple carriers. HSUPA Enhanced JD. Include macro diversity Others.2005 / © Finpro ry / 64 . … … … • Enhanced Technologies Wireless Broadband in China/ Leinonen/ 30.11. 4G Datang Mobile: Long Term Evolution for TDD Multi-Carrier TD-SCDMA • Basic Technologies • • • • • • • • • • • Joint Detection Smart antenna Uplink synchronization DCA HSDPA E-UL. Include space multiplex & beamforming MBMS.

Policy making and public sector’s role 7.2 Communication Standard Association 7.2005 / © Finpro ry / 65 .11.7.3 CJK Standards Meeting Wireless Broadband in China/ Leinonen/ 30.1 CATR 7.

Policy making and public sector’s role • • • • • • China has a planned economy.2005 / © Finpro ry / 66 . using 5-year plans Each 5-year plan gives guidelines and goals for domestic industry In the current 5-year plan (2000-2005) mobile industry has been selected as one of the key industries Mobile industry is in a tight control of the Central government Some of the biggest national research programs are also included in 5-year plans All the operators and number of equipment manufacturers are either fully or partly government owned Wireless Broadband in China/ Leinonen/ 30.7.11.

Same goes to the state owned companies’ operations Wireless Broadband in China/ Leinonen/ 30.11. Policy making and public sector’s role • • Ministry of Information Industry (MII) is the telecom regulator Many of the research activities for wireless technologies are under the Ministry of Science and Technology (MOST) Main focus of government’s research investments is in mobile technologies.2005 / © Finpro ry / 67 • .7.

CATR • Under MII • Telecom research and consulting to support MII’s policy making • The main body in organizing government’s research and funding programs for wireless technologies standardization and development • Core business divided into 7 department Wireless Broadband in China/ Leinonen/ 30. Policy making and public sector’s role 7.1 CATR China Academy of Telecommunication Research.2005 / © Finpro ry / 68 .7.11.

7. Policy making and public sector’s role 7.1 CATR China Academy of Telecommunication Research Organization chart Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 69 .11.

1 CATR Communications Standard Research Institute of CART • Core Services: • • • • • • • • • • • • • • • • • • • • Supporting of governmental administration and regulation Formulating national and industrial telecommunication standards Technical and consultancy service for operators and manufacturers Test and certification of telecommunication equipment Technical trial of telecom technology and product 3G/B3G next generation network ( NGN ) network interconnection and interworking telecom resources of numbers and radio frequency intelligence network Signaling network PSTN broadband packet network IP network optical transmission network synchronous network access network mobile communications network paging.7. Policy making and public sector’s role 7.2005 / © Finpro ry / 70 • Major study area: . trunk and cordless technology microwave and satellite system Wireless Broadband in China/ Leinonen/ 30.11.

Policy making and public sector’s role 7. It has in-depth participation in telecom industry policies.7. This Institute is the main supporting organ serving China communications competent authorities in the policymaking work.2005 / © Finpro ry / 71 .11. Customers: • • • • Ministry of Information Industry State Development and Reform Commission Ministry of Science and Technology The governments at various levels including provincial and municipal Communications Administrations • Telecom operators and manufacturers • Monetary securities & investment institutions • R & D institutions at home and abroad Wireless Broadband in China/ Leinonen/ 30. regulatory policies.1 CATR The Research Institute of Communications Policy of CATR • • The Research Institute of Communications Policy is the specialized policy-making consulting department of CATR under MII. laws & regulations and telecom industry development plan stipulation for a long period of time.

China Communications Standards Association (CCSA) was founded in December 18. such as promulgation of communications standards.7. to organize its members into participating in such activities as drafting standards. and interconnection and interworking tests To promote the implementation of communications standards through carrying out related activities. verification. CCSA • • • With the approval of the MII and Standardization Administration of China and the Civil Affairs Ministry. To organize national and international technical seminars as well as activities of cooperation and exchanges To undertake work related to standardization commissioned by the relevant Authorities. 2002 Also foreign companies and foreign-investment enterprises can apply for joining in CCSA Scope of activities • • To promulgate the state laws. standards consistency testing. regulations and policies on standardization and to facilitate the communication between its members and the Authorities To carry out research and survey activities on communications standardization system . its members and other organizations • • • Wireless Broadband in China/ Leinonen/ 30.2 CCSA China Communication Standard Association. Policy making and public sector’s role 7. coordination. consultation.2005 / © Finpro ry / 72 .11. service and training. soliciting comments.

2005 / © Finpro ry / 73 . Policy making and public sector’s role CJK Standards Meeting CJK Standards Meeting • CJK (China-Japan-Korea) Meeting on Information and Telecommunication Standards started on June 2002 with an initiative of 4 Standards Development Organizations from the respective countries (CCSA as one of them) Background: mutual understanding and cooperation was necessary to promote sound growth and development of the information and telecommunication industries The purpose of CJK Standards Meeting is • to mutually exchange views and information on the status of Information and Telecommunication industries in the three countries • to contribute to the works of standards organizations of regional and global levels • to encourage mutual support and assistance among four SDOs • • • Contribution to the international standards organizations Wireless Broadband in China/ Leinonen/ 30.

2005 / © Finpro ry / 74 .11.2 NSF 8.5 Notable research institutes Wireless Broadband in China/ Leinonen/ 30. Public R&D programs 8.1 General 8.4 FuTURE 8.8.3 863 8.

MII and China Academy of Science (CAS) Each of them have their provincial departments. NGN. Beijing. FuTURE (B3G). Public R&D programs 8. WCDMA.1 General • • • • • • • There are 4 governmental entities launching nationwide public research funding projects: MOST. if the majority (51% or more) of the investment and ownership is domestic. which is then published for public bidding Usually any companies and research institutes can apply for these projects In communication technologies largest projects include research on 3G Networks. CDMA2000. National Planning and Reform Bureau. TD-SCDMA.2005 / © Finpro ry / 75 . Shanghai and Shenzhen are most active cities in launching regional projects Typically in government’s research projects there is an expert group that initiates the project. LAS-CDMA… In government funded projects company’s self-funding ratio is usually 50% Sino-foreign JV’s can also get public funding. Wireless Broadband in China/ Leinonen/ 30.8.11. who have the right to fund regional level research projects.

863.8.2005 / © Finpro ry / 76 . 973. Public R&D programs 8.11.1 General • In national level there are currently 5 main research programs going on in China (NSF. • Among them. NSF & 863 include funding for wireless technology development • Additionally there are large number of regional research projects • Many cities have public funds for SME’s high technology R&D Wireless Broadband in China/ Leinonen/ 30. Starfire & Torch).

37 million USD (1987) to 10. Public R&D programs 8.2 NSF NSF – Natural Science Fund • Covers whole china • Wireless technology development is one of the targets • Funding for private companies • Activities include joint research projects and international academic conferences in China and abroad • Up to now.15 million USD (2004) Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 77 .11. it has signed cooperative agreements and MOU with 60 science funding organizations and national research institutions in 35 countries and regions and raised its budget for international cooperation and exchange from 0.8.

11. with the average funding about 0.8. Public R&D programs 8. NSFC has funded over 52.Natural Science Fund • In the past 15 years.22 million USD • The Division of Information Science had number of projects regarding wireless communication technologies. etc.000 research projects of various categories by investing a total sum of 0. Mobile service Platforms.2 NSF NSF .2005 / © Finpro ry / 78 . Wireless Broadband in China/ Leinonen/ 30. such as UWB.81 billion USD • In 2004 NSF funded 26 Key Program projects. Wireless Broadband in China/ Leinonen/ 30.11.2 NSF 1 CNY = 0.123793 USD (11/05) source: http://www.2005 / © Finpro ry / 79 .cn/e_nsfc/2004/01au/02fs. Public R&D programs 8.nsfc.

11.3 863 863 Program • • • • • • • • • • The National High Technology and Development Program of China Started first time in March 1986 Original program was temporary.2M USD Some projects involve foreign companies as well The most important sub-program for wireless technologies is called FuTURE project Wireless Broadband in China/ Leinonen/ 30. Public R&D programs 8.12-2.2005 / © Finpro ry / 80 .8.5 Million USD About 80% of the projects are around 1. but is now continuous and covers whole country 6 main research sectors. including Information Technology In IT sector. Wireless technology falls under the sub-branche of Communication Technology Annually 3-5 major projects in each main sector Single project funding are between 0.

4 FuTURE The FuTURE Project • China begun developing B3G technologies in 2001.2005 / © Finpro ry / 81 .8. when FuTURE project started • Future Technologies for Universal Radio Environment • FuTURE is under the Communication part of the National 863 Program • Launched by Ministry of Science and Technology (MOST) • The first phase was launched for the 10th 5-years plan (2001-2005).11. Public R&D programs 8. including FuTURE and FuTURE+ phases Wireless Broadband in China/ Leinonen/ 30.

11.2005 / © Finpro ry / 82 . WxAN (WLAN/WPAN/WHAN) Wireless Broadband in China/ Leinonen/ 30. Public R&D programs 8.4 FuTURE The FuTURE Project • The Mission is to “establish universal radio experiment environment that can meet the application demands and technique trends headed for the years around 2010” • Integrates layered wireless communication systems via IPv6 core networks • In broadband side it focuses on Cellular Layer (B3G/4G mobile) and Areas Layer.8.

spectrum and technology trend evaluations (FuTURE) and Demo systems and application development and standard candidate proposals (FuTURE+) • 2nd Phase. FuTURE II (2005-2010) is for trial & pre-commercial systems and standardization work Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 83 .4 FuTURE The FuTURE Project • The 1st phase included vision. Public R&D programs 8.8.11.

2005 / © Finpro ry / 84 . Public R&D programs 8.4 FuTURE The FuTURE Project • 863 / Communication Subject / Wireless communication branch / FuTURE project • It aims at: • meeting the trends and needs in the field of wireless telecommunications in the next 10 years • to carry out investigations on key technologies for air interface of beyond 3G/4G mobile communication system • to set up demo systems to verify the key technologies that can support future wireless services • to improve Chinas overall research capabilities in mobile communications • Enhance China’s international competitiveness during the standardization process of future beyond 3G/4G wireless communication systems Wireless Broadband in China/ Leinonen/ 30.11.8.

Public R&D programs Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 85 .4 FuTURE The FuTURE Project • FuTURE project Coordination Committee undertakes the scientific research management and technological coordination • project will organize international and domestic specialists to carry out research into the B3G system. and operational demands • It cooperates closely with China Wireless Telecommunication Standards (CWTS) and spectrum distribution • Goal is to keep pace with the development of ITU Source: http://www.8.chinab3g. network structure.11.

8.2005 / © Finpro ry / 86 .4 FuTURE FuTURE’s working targets Wireless Broadband in China/ Leinonen/ 30. Public R&D programs 8.11.

Public R&D programs 8.11.4 FuTURE FuTURE technology framework • OFDM/GMC + TDMA/FDMA based multiple access • Distributed radio architecture for improved coverage • IDMA for better multiple cell frequency use • Add-on techniques: • Powerful iterative receiver (turbo receiver) • Advanced Turbo/LDPC channel coding/decoding • Unified MIMO and adaptive time slot structure Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 87 .8.

4 FuTURE Achievements • Active international cooperation on research and standardization • Cooperation with Japan and South-Korea • Big number of patents from funded sub projects • FuTURE B3G test network in Shanghai Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 88 .11. Public R&D programs 8.8.

11.chinab3g.4 FuTURE FuTURE Forum • Established in 2004 • Non-Governmental & non-profit organization • Jointly founded by operators. • to realize the sustainable development of mobile communication through international cooperation between China and the rest of the world Wireless Broadband in China/ Leinonen/ 30.htm . and to promote the research in B3G / © Finpro ry / 89 Source: http://www. equipment providers. • to assess new trends and new technologies. Public R&D programs 8. universities and research institutions both in China and abroad • Objectives: • to clarify the vision of future mobile communication development.

• To provide suggestions to initiate the R&D projects as well as the standardization research • To promote international cooperation between the Chinese and overseas organizations by organizing conferences and seminars • To organize research and discussion activities of the Forum members and to publish professional reports and white papers • To communicate and work with other international consortium • To sort and provide with the latest relevant information Wireless Broadband in China/ Leinonen/ 30.8. Public R&D programs 8.4 FuTURE FuTURE Forum • Working scopes: • To report to governments and relevant organizations the viewpoints and suggestions proposed by Forum members.2005 / © Finpro ry / 90 .11.

5 Notable research institutes Notable research institutes for wireless technology • The Wireless Technology Innovation Institute of Beijing University of Post and Telecom (WTI of BUPT) • Tsinghua University in Beijing • South-East University in Nanjing and Xi’an JiaoTong University • Shanghai Wireless Communication Research Center (Wireless Core) Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 91 .11.8. Public R&D programs 8.

SHRCWC annual research budget is approx. About 80 of the permanent employees are researchers. Wireless Broadband in China/ Leinonen/ 30. Huawei. Nokia.11. 3 million Euros and mainly funded by conducting research projects for government. • Wireless Core is focused on B3G research and is a member of the FuTURE project. Research is focused on physical layer. ZTE. • Wireless core has around 100 employees and the total number (including students) is around 160. Siemens. Chinese Academy of Science (CAS) and Shanghai Municipal Government.5 Notable research institutes Wireless Core • Shanghai Research Center for Wireless Communications is a Non-profitable organization established in 2003 by Ministry of Science and Technology (MOST). Public R&D programs 8. Wireless Core operates the FuTURE B3G test bed in Shanghai. Ericsson.8.2005 / © Finpro ry / 92 . Motorola and key universities. • It has active cooperation with private companies and its partners include for example China Netcom.

2005 / © Finpro ry / 93 .1 General 9. Private sector R&D activities 9.11.2 Network equipment manufacturers 9.3 Handset manufacturers Wireless Broadband in China/ Leinonen/ 30.9.

9. Private sector R&D activities 9.1 General

• • • • •

State owned companies are mainly focusing on 3G and B3G research Majority of the companies still having very limited R&D resources Most of the wireless technology companies buy the core technology from foreign (U.S., Taiwan) companies Most prominent companies in terms of R&D include ZTE, Huawei, Datang and Putian Current trend is to establish Joint Ventures with foreign companies
• Examples: T3G by Datang and Philips, JV by Huawei and Siemens ($100 million- plus), JV by Putian and Nokia ($111 million) , R&D lab by Nortel & Datang

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 94

9. Private sector R&D activities 9.2 Network equipment manufacturers

Network equipment manufacturers: • ZTE: GSM, CDMA2000 3X, WCDMA, TD-SCDMA, WLAN, Wimax, PHS • Huawei: GSM, GPRS, CDMA, WCDMA, TD-SCDMA, WLAN, Wimax • Putian Capitel: CDMA2000 1X, WCDMA, TD-SCDMA • Datang: GSM, CDMA, TD-SCDMA, BTD-SCDMA

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 95

9. Private sector R&D activities 9.3 Handset manufacturers

Mobile phone manufacturers
• • China has granted 38 mobile phone manufacturing license Private companies R&D activities vary a lot
• Tier 1 manufacturers: core technology designed in-house, heavy investments on R&D. e.g. Huawei, ZTE, Datang, Putian • Tier 2 manufacturers: up to 50% design in-house. Mostly big consumer electronic companies who have in early stage been using design houses, but nowadays investing more on own R&D. e.g. Konka, TCL, Ningbo Bird, Haier, Soutec and Kejian. Core technology still outsourced. • Tier 3 manufacturers: own R&D very limited, usually only plastic coating, etc. Buy solutions and components outside and only assembles the phones. e.g. Kejien, Telsda, taxian, Panda Mobile

Generally speaking domestic manufacturers have too much focus on production capacity at the expense of R&D investments

Wireless Broadband in China/ Leinonen/ 30.11.2005 / © Finpro ry / 96

2005 / © Finpro ry / 97 .11. Foreseeable radical changes Wireless Broadband in China/ Leinonen/ 30.10.

2005 / © Finpro ry / 98 .10. Foreseeable radical changes Market is rapidly growing and opening • Rapid growth of urban population: over 200 million people are estimated to move from countryside to the big cities during the next decade • Annual economic growth (around 10%) will continue • Improving living standard changes consuming habits • Market is opening for foreign companies • WTO membership is gradually forcing China to open the mobile market for foreign operators and service providers Wireless Broadband in China/ Leinonen/ 30.11.

2005 / © Finpro ry / 99 . CDMA2000 • Winners and losers among manufacturers Wireless Broadband in China/ Leinonen/ 30.11. Foreseeable radical changes • 3G licenses will probably be granted in 1/Q 2006 • The whole industry is waiting to get confirmed information • License decision will determine: • Scale of TD-SCDMA adoption • WCDMA vs.10.

11.2005 / © Finpro ry / 100 . Wireless Broadband in China/ Leinonen/ 30. the government is now considering to reform the operators. Foreseeable radical changes Big operator reform before 3G license granting? • In order to avoid duplicate investment in telecommunication industry.10. • One possible plan is: Split China Unicom into two: GSM part and CDMA part Split China Railcom into South part and North part China Telecom + China Unicom GSM part + China Railcom North part = China Telecom China Unicom CDMA part + China Netcom +China Railcom South part = China Unicom China Mobile + China Satcom = China Mobile This new plan will affect the situation of China Telecommunication industry and 3G license issue.

10.11. Foreseeable radical changes Other… • Consolidation among service providers is expected to happen in near future due to changes in revenue scheme • New Telecom law to be released in 2006? • will likely outline the gradual opening of VoIP services for foreign players in China • Other changes and outlines • Domestic manufacturers to partner up more and more with foreign players • Government’s decisions will remain unpredictable Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 101 .

11.2005 / © Finpro ry / 102 .11. Finnish companies possibilities in China Wireless Broadband in China/ Leinonen/ 30.

11. At the same time the market is highly competed by domestic and foreign companies • More and more domestic companies are investing on R&D and manufacturing facilities in China • Market for bulk products and services is getting saturated -> Finnish companies need to find the niche market with high quality products. Wireless Broadband in China/ Leinonen/ 30.2005 / © Finpro ry / 103 .11. Finnish companies possibilities in China Finnish companies possibilities in China • China’s mobile market is of huge size and still growing rapidly. Unique content/application or innovative technology can success.

2005 / © Finpro ry / 104 .11.11. Finnish companies possibilities in China Huge demand of Mobile VAS market • Booming VAS market creates huge need for premium content and innovative applications • Branded content and high quality games • Market for professionally used applications is starting to grow • Localization is required (language and culture)! Wireless Broadband in China/ Leinonen/ 30.

Finnish companies possibilities in China Fulfill the needs of operators • Near future. will see a boom on network investments • Both “green field” and upgrades • Already need for reliable and effective billing.11.11. provisioning and CRM systems • DRM systems • Tools for network planning and optimizing • Sharing the experiences in 3G business model Wireless Broadband in China/ Leinonen/ 30. especially the coming 3G era.2005 / © Finpro ry / 105 .

11.2005 / © Finpro ry / 106 . Finnish companies possibilities in China Converging the diversified infrastructure • Multiple standards need interoperability • Multimode handsets • Unified platforms • Services for different platforms Wireless Broadband in China/ Leinonen/ 30.11.