1. Kai Wei Helsinki University of Technology Telecommunications Software and Multimedia Laboratory kaiwei@cc.hut.fi 3G situations in China

2. Agenda Current mobile market situation in China Current mobile market situation in China Attitude of government Attitude of government Attitude of old and new operators Attitude of old and new operators Attitude of vendors Attitude of vendors

3. Distribution of telecom services revenue

4. Five Tele Operators China MobileChina Mobile GSM GSM China UnicomChina Unicom GSM GSM CDMA CDMA China Telcom, China NetcomChina Telcom, China Netcom Fixed network Fixed network PHS (Personal Handyphone System) PHS (Personal Handyphone System) China RailcomChina Railcom Fixed network Fixed network

5. Way to issue license AuctionAuction plenty income to goverments plenty income to goverments heavy burden to operators heavy burden to operators public biddingpublic bidding manipulable, not choose winner only based on price offer, but also its capability and technical offer are taken into account manipulable, not choose winner only based on price offer, but also its capability and technical offer are taken into account left room for operators to build up network left room for operators to build up network

6. Government Attitude on 3G 3G technology is mature 3G technology is not mature –changing standard –existing problems –no killer application China initialized 3G standard is not ready 3G field test is going on, will complete on Q4/2004

7. Strong Support TD-SCDMA Government officiers express support explicitly Allocate 155M frequency to TD-SCDMA vs. 120M to both WCDMA and CDMA2000 together Help to organize TD-SCDMA strategy alliance TD-SCDMA bound to each license

8. Attitude of operators on 3G CMCC ( China Mobile Communication Company) CMCC ( China Mobile Communication Company) – –The biggest GSM operators in the world – –Have to face more competitors when 3G is deployed – –Invest heavily on 2.5G, not like to deploy 3G soon – –No killer application + lack of frequency in GSM + Prefer to WCDMA + TD-SCDMA

9. Attitude of operators on 3G Unicom ( China United Communication Company) Unicom ( China United Communication Company) – –Run both GSM and CDMA network – –Invest on 2.5G on CDMA network, not on GSM network – –Four Chanllenges Where can it get investment on 3G? Which standard should it choose for 3G? If favors of CDMA2000, how can it deal with its GSM network? EV-DO ? EV-DV CDMA2000 return from CDMA 2.5G network & various financing methods develop dual-mode mobile now: EV-DO future: depends

10. Attitude of operators on 3G China Telecom & China Netcom China Telecom & China Netcom – –Fix network operators + Use PHS to conquer wireless market + Hope 3G license is issued asap + China Telecom prefers WCDMA

11. Attitude of operators on 3G China Railcom China Railcom – –Small fix network operators – –No interesting on 3G market yet

12. Attitude of vendors on 3G Local vendors Local vendors – –DaTang concentrates on TD-SCDMA – –Others prompting WCDMA and CDMA2000 – –New trend to TD-SCDMA Foreign vendors – –Promoting WCDMA and CDMA2000 crazily – –Like to build networks cooperating with TD-SCDMA standard

13. Conclusion Possible schedule Possible schedule – –Year 2005 Number of license – –4 pieces of 3G license Type of licenses – –If TD-SCDMA is ready 2 pieces of WCDMA+TD-SCDMA 1 TD-SCDMA 1 CDMA2000+TD-SCDMA – –If TD-SCDMA is not ready 3 pieces of WCDMA+TD-SCDMA 1 CDMA2000+TD-SCDMA