3G Still A Long Shot In China

SHANGHAI, China — Wait. Wait some more — and then a little more for good measure. Patience is a survival strategy in the 3G game in China. And after about four years of waiting, now it looks like chipmakers will be strung along a little more as 3G licenses may be pushed out to next year instead of early this year, as originally thought.

3G delays are almost as synonymous with China as green tea. No one knows for sure what will happen, since Beijing is covered in a shroud of opacity. But state-controlled media reports are saying that testing of China's 3G standard is being extended into the fourth quarter. That kills any shred of hope handset chipmakers had for cashing in on 3G phones this year.

For the small chipmakers who are betting on TD-SCDMA, the testing delay is especially sour news, even more so since it comes after encouraging reports from government insiders that the country's largest mobile carrier, China Mobile, would deploy the technology.

"It looks like this year will mostly be about building the network infrastructure," said Vincent Tai, chief executive of Shanghai-based RDA Microelectronics, which has developed an RF transceiver and power amplifier for TD-SCDMA. "It's possible that it could happen this year, but probably not."

China has more than 400 million mobile users, with millions more signing up every month. Spending on its 3G market will easily run into the tens of billions of dollars over the next few years as networks are fully built out. But China has held back on issuing licenses because of the immaturity of its local standard, leaving confounded chip and gear makers to await the spending spree's start.

Chinese officials have repeatedly said 3G will be ready by the 2008 Summer Olympics. It may be, but with the caveat that it is only available in the cities hosting Olympic events.