USITO Weekly 2/6/2009: 15 TD-supporting measures

Fifteen measures to support TD-SCDMA

On January 22, a few Chinese ministries, including MIIT (Ministry of Industry and Information Technology), Ministry of Finance, State Admin. of State-owned Assets, and Ministry of Science and Technology, jointly announced a series of policies for China's homegrown 3G industry, i.e., the TD-SCDMA business run by China's largest mobile carrier China Mobile, vowing to support the development of TD-SCDMA. The policy measures include 15 items, which fall in six categories: financial aid, project support, network construction, product research, commercialisation, and industry development.

Important measures worth noting include: 1. China will add TD-SCDMA to the official procurement list; 2. TD-SCDMA developers will be given priority in receiving government R&D fund; 3. The regulatory body will allow the possibility of discounted calls through the TD-SCDMA network. tech.sina.com.cn, 1/22/2009

USITO Notes: The measures are aimed at accelerating the development of the homegrown 3G standard, which once appeared tardy due to the lack of a sound value chain. China Mobile, the license holder for TD-SCDMA, started to offer TD services during Beijing Olympics, and has so far developed merely 400,000 or so subscribers, after 10 months of business offering. The new policies will give more stimulus to the operator. China Mobile has just planned to extend the services to 238 cities within this year, from the current 10 cities running commercial TD services.

It remains doubtful whether the inclusion of TD products into the government procurement catalog would do some good for the outlook of the industry. USITO continues to advocate a pro-competitive procurement framework, which ensures that the government as a user of technology obtains the best goods and services for the best value. Limiting government procurement to products based on nationality of IP
ownership or other indigenous innovation factors fails to appreciate the truly global and cross-border nature of innovation and product development, as well as the very substantial and critical contributions that multinational technology companies are making to China’s own capacity as a global innovation leader.

Countdown of Chinese "Little Smart" Business

MIIT sources said early this week that China's Little Smart (personal handphone system) will withdraw from the Chinese market within three years, in order to give away its 1900-1920MHz frequency band for TD-SCDMA by year-end 2011.

MIIT stats show that the number of Little Smart users was 68.931 million by 2008 end, down from almost 100 million during its peak.

As reported in the last issue of USITO newsletter, MIIT reallocated 3G frequency bands for China's three carriers in January. China Unicom and China Telecom each acquired a 30M frequency range, and China Mobile got 35M. it.sohu.com, 2/3/2009

USITO Notes: The move was considered another supportive measure taken by the government for TD development. Currently, China Unicom and China Telecom, the two operators of Little Smart's business, have promised to stick up for their customers interests by transferring them to other mobile telecom networks and offering some preferential services.

Little Smart business as a quasi-mobile service is a unique China phenomenon. It came into being in the late 1990s, at the background that China's mobile sector was highly monopolized and mobile tariff was ridiculously high. With very cheap voice rate and rich subsidy, the business grew sharply in the next years, even threatening the mobile carriers China Mobile and Unicom. However, the business began slumping two or three years ago as mobile carriers began cutting their charges. At the current stage, the Little Smarter carriers are eyeing to shift that business to 3G, since with mobile licenses available they have no reason to stick to that antique technology.

China to expand rural household appliance subsidy (Jia Dian Xia Xiang) policy nationwide this year

China's coverage of rural household appliance subsidy policy will be expanded across the country this year, according to the Ministry of Commerce. Coverage of the policy has been extended from incipient four pilot regions, namely Shandong, Henan, Sichuang provinces and Qingdao city, to 14 provinces and cities of Inner Mongolia Autonomous Region, Guangxi Zhuang Autonomous Region, Liaoning, Heilongjiang, Anhui, Hubei, Hunan, Shaanxi provinces, Dalian city, and Chongqing Municipality on December 1, 2008, and will be widened nationwide starting from February 1 this year. Detail

China blacklists 17 more Web sites in porn crackdown

China blacklisted another 17 Web sites as part of a monthlong drive to stamp out online porn. The Web sites were accused of providing obscene content and of being slow to delete erotic materials after the campaign was launched on Jan. 5 by the State Council's Information Office, Public Security and Culture ministries and four other government agencies. Detail