The development comes as ZTE intensifies construction of pilot 3G networks in conjunction with both China Mobile and China Netcom, using the mainland’s homegrown TD-SCDMA standard.
According to Emily Wang, general manager at Publicis shop Brand X, the agency handle brand strategy and creative development, to educate consumers about 3G.
According to Emily Wang, general manager at Publicis shop Brand X, the agency handle brand strategy and creative development, to educate consumers about 3G.
“3G is not a new concept to Chinese consumers - they know it, but they don’t know the exact product. I think it will be popular over the next three years, but not next year, because people need to be educated,” said Wang.
“There will be two phases - the first phase will be to tell the consumer what it is. The second phase will be to launch the product.”
ZTE’s current market share in China has reached almost five percent. Its eight million CDMA handsets already surpasses Motorola and LG.
Currently, the Chinese Government has yet to issue formal 3G licences, despite expectations that the system would be up and running by the time of next year’s Beijing Olympics. Instead, China Netcom and China Mobile are constructing pilot networks, the former’s in Qingdao, and the latter’s across eight major cities including Beijing, Shanghai and Guangzhou.
According to at least analyst, meanwhile, this may mark the full extent of China’s 3G investment. “I think there’s a compromise in place,” said IDC director of telecoms services Bill Rojas. “China Mobile will do it for eight to 10 cities, in time for the Olympics, then walk away from it.”
Rojas’ observations come amid increasing scepticism over China’s decision to opt for a homegrown standard. “Given the fact that TD-SCDMA won’t have a market outside China and that all the companies which make chipsets for handsets are not in China, there’s no way that TD-SCDMA handsets could be competitive.”
Rojas added that any 3G launch would require the kind of competitive pricing that has not been in evidence in Asia’s other 3G markets: Hong Kong, Singapore and Australia. “There is a camp inside China saying why don’t we just skip 3G and wait for 4G to be ratified, which would be in 2014.”
Despite Rojas comments, others expect China to push ahead with a full 3G roll-out - which would include other wireless technologies, such as HSPA and CDMA, alongside TD-SCDMA.
Some investment banks, in particular, expect that up to US$75 billion will be spent by China’s carriers to take 3G nationwide. “Consumers want mobile internet access; that pent-up demand is also there for ringtones and video clips,” admitted Rojas. “It might be possible to use advertising to subsidise the cost of handsets - but it won’t happen in China.”
