Wednesday, January 25, 2006

CHINA LAUNCHES TD-SCDMA TELECOM STANDARD: In what has been a growing trend in China, standardized technologies that enjoy strong patent protection outside of China are being shunned by the Chinese government in favor of domestically-developed systems. The idea behind this policy is to avoid paying royalties to foreign patentees, and hopefully use China's market power to force the outside world to adapt to their home-grown technology.

One such example is Enhanced Versatile Disc (EVD) technology, which is China's effort to undercut the global DVD market. Since about 20-30% of DVD player costs coming from China are due to licensing fees, implementing the EVD standard was seen as an "end-around" that would propel Chinese DVD makers to the forefront. To date, adoption of EVD has been unsuccessful.

Another example is Time Division Synchronous Code Division Multiple Access (TD-SCDMA) technology which is China's answer to the 3G telecom standard. Currently, patents held by Qualcomm and Europe's 3G Consortium prevent Chinese companies from using this technology without royalty payments. Again, China has been developing the TD-SCDMA standard to give the advantage to local vendors in the rollout of 3G and avoid paying royalties to foreign companies that hold the patents for other 3G technologies.

The Chinese government recently announced that ii is ready to launch a nationwide network that will run the home-grown 3G standard, and is preparing to issue licenses to "competent" operators to run the standalone network. China has been postponing licenses in order to give the standard time to mature, but it’s running out of time, since the country has promised to get the TD-SCDMA networks up and running to show off at the 2008 Olympics.

Read more here and here.

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