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The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Thursday, April 10, 2008

TD-SCDMA Cost comparison and potential problem areas

My last post on TD-SCDMA is as follows:


The following is another comparison site by Netease Tech department.


There are a lot of photos in this site. Not much new information from the last review by Netease. But it does have the cost structure in the table form. I will list the cost comparison between TD-SCDMA vs GSM in the following table:




Monthly Fee

Monthly Fee






Caller = .4/min, Called = Free



Caller = .6/min, Called = .4/min

Caller = .6/min, Called = .4/min

Long Distance

.07 per 6 second

.07 per 6 second



Caller = .6/min, Called = Free



Caller = .9/min, Called = .6/min


Long Distance

.1 per 6 second


Package Deal

$28 for 150 minutes


$58 for 350 minutes

$88 for 600 minutes









Internet Cost

$10 for 30MB

$5 for 10MB

$50 for 200MB

$20 for 50MB

$200 for 4GB

$100 for 800MB

$300 per 8G

$200 for 2GB

From the above table, the better service (TD-SCDMA) actually cost less than the existing and inferior service (GSM) for services common to both. In addition, for services that are unique to TD-SCDMA, the cost is extremely reasonable.

Considering how Chinese youth regards their mobile phones as status symbols, I am certain there will be a lot of demand for this service. Also considering that this is a brand new service, I am also certain that the handset makers are probably going to be conservative in producing the mobile phones. Thus, I think the supply will be limited.

From the review so far, this technology seems to be more mature than I originally thought. But several problem areas may start to emerge. I will list them out below:

1. Lack of coverage. This is to be expected at this early stage of network deployment.

2. Good voice but unstable video. As video requires more resource for the network, lack of network coverage may contribute to this. But other factors that may point to the fundamental deficiency of the TD-SCDMA may be involved. If China Mobile build out the network, and this problem still exist, we may have a problem.

3. Unstable coverage while moving. If there are insufficient coverage, as the caller or the called moved around, it went in and out of areas that have coverage, the result is of course unstable coverage. But if may also point to problems that is more fundamental. This is another area to be looked at.

4. Power consumption issue. There are conflicting report on this. But we know only a handful of companies have build handsets for this standard so far. Most of these companies are domestic and not very sophisticated in designing handsets. In addition, there are usually significant power saving between the 1st and 2nd generation handset design by the same company. I don’t know if the standard itself caused the power consumption issue. But it is probably going to take 1 year until the second generation handsets start to arrive before we can say with any certainty about the cause of this issue.

5. Good voice and video service but unstable internet browsing experience. This actually could be a problem that is difficult to solve. Again, have to keep track of further review that come out to see if this is a problem.

6. Nobody to call because nobody have the 3G service yet. Well, this is the chicken and egg question. This is really to be expected.

7. Only 6 handset makers and very little handset selections. Again, this is the chicken and egg question. This is to be expected.

8. Very little new ingenious services that uses the extra bandwidth. Since this is the start of 3G, this is to be expected. But there are another factor involved. If Chinese government allows its mobile operators such as China Mobile to be both the competitor and regulator, like what happed with the WVAS area, then there won’t be any new ingenious service. At this point, China Mobile and China Unicom serve as monopoly in the area of WVAS. As a result, there is no inventiveness. The small WVAS have to resort to junk emails, or porns to stay alive. Unless China government changes the underlining structure, nothing is going to happen in this area.

9. People are waiting for the real 3G. It is possible that most people are waiting for the roll out of WCDMA and CDMA2000. This could be the big one. I don’t know about the psychic of average Chinese youth. Do they go after the latest fad or do they think TD-SCDMA is just a precursor to the real thing (WCDMA and CDMA2000).

In my mind, TD-SCDMA will either get 60% of the market share of China or 0%. Nothing in between. In pure free market condition, TD-SCDMA will not have a chance in hell when compared to the more established standards. The only way it can survive is if Chinese government give TD-SCDMA a 3 to 4 years head start by a proven operator (that is China Mobile). Yes, it will not be permitted by WTO. But I fully expect by the time WTO has furnished its verdict, it will be fate-accompli. If that is the case, I don’t think average Chinese youth will wait that long to use the 3G service. Therefore, TD-SCDMA will get the dominate share of China’s market.

We will probably have to wait for a few months for more reviews to see how the trial goes. But so far, everything look good so far. That may mean we may be seeing a short trial period and roll out can be as soon as this summer. If that is the case, we are most likely seeing demand far exceeds supplies.

Finally, a kick ass TD-SCDMA phone. It is made by Lenovo. See the following two links for the video demonstrations.



The name of the phone is Lenovo Ideapad U8. It is still in prototype. The phone is just awesome. If TD-SCDMA solved all its technical and roll-out issues, there is no way the average Chinese youth won’t go after this handset.


pamela said...

WCDMA handsets will cost more because of royalties and patents and the WCDMA network is more costly to deploy. TD-SCDMA works better in densley poplulated places but does not provide good wide area coverage for rural places. I see China Mobile getting TD-SCDMA for China's 100 to 300 biggest cities and WCDMA being used in rural settings and smaller cities.

HenryC said...


Can you tell me the reason why is TD-SCDMA better than WCDMA in the big cities?

Is it because TD-SCDMA have better spectrum efficiency so that it can support more users per frequency band?


A test for now