China Mobile opens $3.1 billion TD-SCDMA tender

China Mobile Communications Corp.has launched the tender process for its Rmb24 billion (about $3.1 billion) TD-SCDMA network. While Chinese vendors are expected to take the lion's share of the contracts, foreign vendors won't lose out. The world's largest mobile phone service operator by number of subscribers is forging ahead with the TD-SCDMA technology even before it has secured a license.

China Mobile is seeking bids for contracts reportedly worth $3.1 billion in total, of which $2.6 billion will be for network equipment and $500 million for TD-SCDMA handsets.

China Mobile wants eight vendors for its national TD-SCDMA network: four each for the radio access and core networks.

According to BDA China Ltd., a consultancy service, the key vendors that China Mobile is evaluating for radio access are Datang Mobile Communications Equipment Co. Ltd., ZTE Corp., China Putian and TD Tech Ltd.

In the core network, the main vendors are Alcatel Shanghai Bell Co. Ltd., Ericsson AB, Nokia Corp. and ZTE, according to BDA China. Ericsson and Nokia could not confirm that they were bidding as this article was published. About 70 to 80 percent of the network cost will be in radio access equipment, which means there is about $2.1 billion worth of business to be had. And this will mostly go to Chinese companies, says Meiqin Fang, principal analyst at BDA China. "The Chinese government may have some preference toward some specific vendors," she says. "It is possible."

"Chinese vendors will be the main beneficiaries," said Patrick Donegan, senior analyst at Heavy Reading. "From the perspective of foreign equipment vendors, TD-SCDMA is an unwelcome distraction from global standards but one which they dare not ignore, because refusing to participate in the TD-SCDMA market in some way would put at risk their positioning for W-CDMA equipment contracts."