Technologies and Standards for TD-SCDMA Evolutions to IMT-Advanced

Picture Source: http://www.itu.int/dms_pub/itu-t/oth/21/05/T21050000010003PDFE.pdf

This is a summary of a paper from IEEE Communications Magazine, Dec 2009 issue titled "Technologies and Standards for TD-SCDMA Evolutions to IMT-Advanced" by Mugen Peng and Wenbo Wang of Beijing University of Posts and Telecommunications with my own comments and understanding.

As I have blogged about in the past that China Mobile has launched TD-SCDMA network in China and the main focus to to iron out the basic problems before moving onto the evolved TD-SCDMA network. Couple of device manufacturers have already started working on the TD-HSPA devices. Couple of months back, 3G Americas published a whitepaper giving overview and emphasising the advantages of TDD flavour of LTE as compared to FDD. The next milestone is the IMT-Advanced that is under discussion at the moment and China has already proposed TD-LTE-Advanced which would be compatible with the TD-SCDMA technology.

For anyone who does not know the difference between TDD, FDD and TD-SCDMA please see this blog.

The TD-SCDMA technology has been standardised quite a while back but the rollout has been slow. The commercial TD-SCDMA network was rolled out in 2009 and more and more device manufacturers are getting interested in the technology. This could be due to the fact that China Mobile has a customer base of over 500 million subscribers. As of July 2009 over 100 device manufacturers were working on TD-SCDMA technology.

The big problem with TD-SCDMA (as in the case of R99 3G) is that the practical data rate is 350kbps max. This can definitely not provide a broadband experience. To increase the data rates there are two different approaches. First is the Short Term Evolution (STE) and the other is Long Term Evolution (LTE).

The first phase of evolution as can be seen in the picture above is the TD-STE. This consists of single carrier and multi-carrier TD-HSDPA/TD-HSUPA (TD-HSPA), TD-MBMS and TD-HSPA+.

The LTE part is known as TD-LTE. There is a definite evolution path specified from TD-SCDMA to TD-LTE and hence TD-LTE is widely supported by the TD-SCDMA technology device manufacturers and operators. The target of TD-LTE is to enhance the capabilities of coverage, service provision, and mobility support of TD-SCDMA. To save investment and make full use of the network infrastructure available, the design of TD-LTE takes into account the features of TD-SCDMA, and keeps TD-LTE backward compatible with TD-SCDMA and TD-STE systems to ensure smooth migration.

The final phase of evolution is the 4G technology or IMT-Advanced and the TD-SCDMA candidate for TD-LTE+ is TD-LTE-Advanced. Some mature techniques related to the TD-SCDMA characteristics, such as beamforming (BF), dynamic channel allocation, and uplink synchronization, will be creatively incorporated in the TD-LTE+ system.

Some academic proposals were also made like the one available here on the future evolution of TD-SCDMA but they lacked the industry requirements and are just useful for theoretical research.

The standards of TD-SCDMA and its evolution systems are supervised by 3GPP in Europe and by CCSA (Chinese Cellular Standards Association) in China. In March 2001 3GPP fulfilled TD-SCDMA low chip rate (LCR) standardization in Release 4 (R4). The improved R4 and Release 5 (R5) specifications have added some promising functions including HSDPA, synchronization procedures, terminal location (angle of arrival [AOA]-aided location), and so on.

When the industry standardizations supervised by CCSA are focusing on the integration of R4 and R5, the N-frequency TD-SCDMA and the extension of HSDPA from single- to multicarrier are presented. Meanwhile, some networking techniques, such as N-frequency, polarized smart antenna, and a new networking configuration with baseband unit plus remote radio unit (BBU+RRU), are present in the commercial application of TD-SCDMA.

TD-SCDMA STE

For the first evolution phase of TD-SCDMA, three alternative solutions are considered. The first one is compatible with WCDMA STE, which is based on HSDPA/HSUPA technology. The second is to provide MBMS service via the compatible multicast broadcast single-frequency network (MBSFN) technique or the new union time-slot network (UTN) technique. The last is HSPA+ to achieve similar performance as LTE.

On a single carrier, TD-HSDPA can reach a peak rate of 2.8 Mb/s for each carrier when the

ratio of upstream and downstream time slots is 1:5. The theoretical peak transmission rate of a three-carrier HSDPA system with 16-quadrature amplitude modulation (QAM) is up to 8.4 Mb/s.

Single-carrier TD-HSUPA can achieve different throughput rates if the configurations and parameters are varied, including the number of occupied time slots, the modulation, and the transport block size in bytes. Considering the complexity of a terminal with several carriers in TD-HSUPA, multicarrier is configured in the Node B, while only one carrier is employed in the terminal.

In Rel-7 based TD-HSPA+, In order to match the performance of orthogonal frequency-division multiple access (OFDMA)-based TD-LTE systems, some advanced techniques are utilized, such as multiple-input multiple-output (MIMO), polarized BF, higher modulation and coding schemes (64-QAM is available), adaptive fast scheduling, multicarrier techniques, and so on. Theoretically, 64-QAM can improve performance by a factor of 1.5 compared to the current 16-QAM; for single-carrier the peak rate reaches 4.2 Mb/s, and three-carrier up to 12.6 Mb/s.

For the MIMO technique, double transmit antenna array (D-TxAA), based on the pre-coding method at the transmitter, has been employed in frequency-division duplex (FDD)-HSPA+ systems, while selective per antenna rate control (S-PARC), motivated by the Shannon capacity limit for an open loop MIMO link, has been applied in TD-HSPA+ systems.

TD-SCDMA LTE

The TD-SCDMA LTE program was kicked off in November 2004, and the LTE demand report was approved in June 2005. The LTE specified for TD_SCDMA evolution is named TD-LTE.

LTE systems are supposed to work in both FDD and TDD modes. LTE TDD and FDD modes have been greatly harmonized in the sense that both modes share the same underlying framework, including radio access schemes OFDMA in downlink and SC-FDMA in uplink, basic subframe formats, configuration protocols, and so on.

TD-LTE trials have already started last year with some positive results.

TD-SCDMA LTE+

IMT-Advanced can be regarded as a B3G/4G standard, and the current TD-SCDMA standard migrating to IMT-Advanced can be regarded as a thorough revolution. TD-LTE advanced (TD-LTE+) is a good match with the TD-SCDMA revolution to IMT-Advanced.

It is predicted that the future TD-SCDMA revolution technology will support data rates up to approximately 100 Mb/s for high mobility and up to approximately 1 Gb/s for low mobility such as nomadic/local wireless access.

Recently, some advanced techniques have been presented for TD-LTE+ in China, ranging from the system architecture to the radio processing techniques, such as multi-user (MU)-BF, wireless relaying, and carrier aggregation (CA).

For MU-BF see the paper proposed by Huawei, CHina Mobile and CATT here (http://www.3gpp.org/ftp/tsg_ran/WG1_RL1/TSGR1_55b/Docs/R1-090133.zip).

For Wireless Relaying see the ZTE paper here (http://www.3gpp.org/ftp/tsg_ran/WG1_RL1/TSGR1_56b/Docs/R1-091423.zip).

To achieve higher performance and target peak data rates, LTE+ systems should support bandwidth greater than 20 MHz (e.g., up to 100 MHz). Consequently, the requirements for TD-LTE+ include support for larger transmission bandwidths than in TD-LTE. Moreover, there should be backward compatibility so that a TD-LTE user can work in TD-LTE+ networks. CA is a concept that can provide bandwidth scalability while maintaining backward compatibility with TD-LTE through any of the constituent carriers, where multiple component carriers are aggregated to the desired TD-LTE+ system bandwidth. A TD-LTE R8 terminal can receive one of these component carriers, while an TD-LTE+ terminal can simultaneously access multiple component carriers. Compared to other approaches, CA does not require extensive changes to the TD-LTE physical layer structure and simplifies reuse of existing implementations. For more on Carrier Aggregation see CATT, LGE and Motorola paper here (http://www.3gpp.org/ftp/tsg_ran/WG1_RL1/TSGR1_56b/Docs/R1-091655.zip).

Finally, there are some interesting developments happening in the TD-SCDMA market with bigger players getting interested. Once a critical mass is reached in the number of subscribers as well as the manufacturers I wouldnt be surprised if this technology is exported beyond the Chinese borders. With clear and defined evolution path this could be a win-win situation for everyone.

MBMS and AMR-WB

Nokia publicly underlined its commitment to broadcast-mobile-TV standard DVB-H with the recent unveiling of the mobile TV edition of the Nokia 5330 and its pretax, presubsidy price tag of €155 (US$230), after some in the industry had questioned its enthusiasm for launching new DVB-H devices. Nokia also quelled any suggestions that it might start supporting the MBMS standard with its future device launches.

The price is a massive drop from the €550 price tag carried by Nokia’s last fully DVB-H-compatible handset, the N96, which launched in 3Q08. So the official line from Nokia is this: “All is well on the good ship DVB-H.”

Read more here.

Meanwhile, In China, China Unicom has launched 3G telecom services in 268 cities across the country, said Li Gang, another deputy general manger for Unicom Group, noting that the WCDMA network supports a 14Mbps download data transmission speed and a 7.2Mbps upload data transmission speed.

Notably, the carrier has adopted the most advanced R6 technology in its core WCDMA network to smooth a WCDMA-to-EPS migration in the future, according to Mr. Zhang.

The China Unicom network is expected to support MBMS and HSPA+64QAM technology in the first phase of a further evolution, shore up a HSPA+MIMO technology in the Phase II evolution, and prompt a LTE technology in the Phase III evolution, said Mr. Zhang, adding that the network will present a 100Mbps download speed and a 50Mbps upload speed after the Phase III evolution.

Read more here.
Back in September, Orange Moldova announced the launch of the world's first mobile telephone service offering high-definition (HD) sound. The service will provide customers with a significantly improved quality of service when making calls. Unlike for other mobile technologies such as multimedia capabilities, this is the first time since the 1990s that mobile voice technologies have been subject to a significant evolution.

This is the second step in Orange’s HD voice strategy, following on from the launch of a high-definition voice service for VoIP calls in 2006. Over 500,000 Livephone devices have already been sold in France and the range will be extended to other Orange countries over the coming months.

The first mobile handset integrating high-definition voice capability that will be launched by Orange Moldova is the Nokia 6720c. This innovative handset integrates the new WB-AMR technology, which is widely expected within the industry to become a new standard for mobile voice communications.

Thanks to the Adaptive Multi Rate-WideBand (AMR-WB) codec, double the frequency spectrum will be given over to voice telephony over traditional voice calling. Orange boasts that the result is "near hi-fi quality" and "FM-radio quality", which seems an odd comparison.

Upto 25 million mobiles in trouble in India

I blogged about the Shanzhai phones earlier and mentioned that since they dont have an IMEI, they can cause problems for the security officials and India was considering banning them.

Now, this has finally happened. Mobile phones without the code were blocked at midnight - operators were asked to bar calls to them "in the wake of increased threat perception from militants".

The absence of this number makes it impossible to trace either the caller or the phone or to access call details.

Indian intelligence agencies say phones without the code have been used in attacks by militant groups.

The International Mobile Equipment Identity (IMEI) number is a 15-digit code which appears on the operator's network whenever a call is made.

It is estimated that India has more than 25 million phones without codes. Phones with no codes or invalid numbers are mostly cheap, unbranded phones. Millions are manufactured in India or imported, mostly from China.

If you're one amongst the estimated 25 million users with such phones and wish to have the phone in working condition again, (in case yours went offline as well) there is a legal way of doing it. The government has authorized some organizations to legalize your illegal handsets by assigning an approved IMEI number to it. The GII (Genuine IMEI Implant) program involves a short trip to the nearest GII outlet, paying a nominal Rs. 199 fee to have your phone legalized.

In major cities, you can visit The MobileStore outlets to get this done. You might also want to contact your operator if they have arranged for any such facilities. For those interested in The MobileStore program, all you need to do is to call 6000 63 63 to figure out the nearest outlet where your Chinese phone can get a new lease of life

The MobileStore claims to have successfully done over 30,000 IMEI implants in over 60 cities.

Updates from GSMA Asia Mobile Congress 09 - Day 1

Summary of interesting facts from the GSMA Mobile Asia Congress 09, Via Tomi Ahonen's, Communities Dominate Brands:

• According to Rob Conway, CEO of the GSM Association, the number of subscribers will grow to 8 Billion (not sure when though).
• China Unicom, China's second largest mobile operator with 142 million subscribers - bigger than AT&T and Sprint put together.
• Bharti Telecom of India has over 110 million subscribers
• According to Manoj Kohli, the CEO of Bharti Telecom, India already 20% of all mobile phone owners have 2 or more subscriptions. He also told us that as India will add 500 million new subscribers by the time frame of 2014-2015. India is currently adding 10 million new mobile subscribers every month. And most revealingly, he said that in India the customers will go from 'no internet' directly to 'mobile internet'.
• According to Wang Jianzhou the Chairman and CEO of China Mobile, the world's biggest mobile operator with over 500 million subscribers, on the Chinese 3G standard of TD-SCDMA, they already have 3G phones being sold that cost about 1,000 Yuan, or about 130 US dollars. The average China Mobile customer spends 1 minute per day on voice calls, but sends on average 3.6 SMS text messages per day.
• According to Yamada-san, the President and CEO of Japan's NTT DoCoMo, on NTT DoCoMo's network, today already 42% of their total revenues come from non-voice data services. NTT DoCoMo is so far in its migration of its customer base from 2G to 3G, they will terminate 2G in March of 2011.
• Yamada-san also told of their new 3G video TV service, they call BeeTV. BeeTV is special in that it is optimized for the small screen, not re-purposed video content from TV and the internet. BeeTV in only six months has achieved 800,000 paying subscribers - who pay 315 Yen per month (about 3 USD).
• Yamada-San's 20 minute presentation also mentioned that NTT DoCoMo's i-Consierge service (yes, think of it as your personal butler, the phone learns your habits and starts to help you with your life, this is like magic) has 2.3 million paying subscribers one year from launch. Their i-Channel idle screen invention is spreading and they have launched it also with their partner in India, Tata, who offer Cricket game updates via the idle screen using i-Channel.
• Japan's mobile advertising market in 2008 was worth 900 million dollars.
• Grameenphone and Huawei won the 'Green Mobile' award for their 'green' network initiatives.

Read the complete blog here.

China proposes TD-LTE-Advanced as its candidate for 4G

The International Telecommunication Union (ITU) has recently received six candidate technology submissions, including China's domestically-developed TD-LTE-Advanced for the global 4G (IMT-Advanced) mobile wireless broadband technology.

China's Ministry of Industry and Information Technology (MIIT) said on October 26 that it will fully support TD-LTE-Advanced in competing to be qualified as global 4G standard technology and promote development of related industries.

TD-LTE-Advanced, which is the intellectual property of China, inherits some of the major technical elements of TD-SCDMA, but will be able to offer an extended bandwidth and higher speed for Internet access.

Currently, 3GPP's LTE-advanced and IEEE's 802.16m are the two major 4G technologies. TD-LTE-Advanced was submitted at the ITU meeting as IMT-Advanced candidate technology, which is supported by major telecom operators and network device manufacturers including France Télécom, Deutsche Telekom, AT&T, NTT, KT, China Mobile, Ericsson, Nokia, Huawei and ZTE.

The selected technologies are expected to be accorded the official designation of IMT-Advanced - to qualify as true 4G technologies - in October 2010.

I was unable to locate more information on TD-LTE-Advanced. Will update once I have some more info.

All eyes on China Mobile TD-SCDMA network

China Mobile plans to spend more on 3G terminal subsidies in 2010.

The outfit has tripled the amount of subsidies from the current year level and is expected to spend $4.4 billion next year. The huge amounts of cash will enable the outfit to push into the 3G space in the worlds largest economy.

China Mobile has 70 per cent of the Chinese wireless market but has been taking a caning from China Unicom. The outfit uses its own TD-SCDMA 3G standard but with that sort of money to spend it is fairly clear that foreign salesmen will be showing up trying to flog the outfit shedloads of 3G gear.

The company recently launched a line of smartphones dubbed Ophones based on the TD-SCDMA technology which uses Google's Android mobile operating system.

All three carriers have commercially launched their 3G networks over the recent months, but take-up has been slow. Market leader Mobile has been hamstrung by the limited number of handsets for the new TD-SCDMA system.

But now with its device range expanding and the network expected to be rolled out to 238 cities by year-end, the market’s 800-pound gorilla appears ready to assert itself.

Analyst firm BDA says China Mobile plans to spend 120 billion yuan on handset subsidies this year, most of it on TD-SCDMA. It laid out 50 billion on subsidizing phones in the first half of the year, with less than 12% going to TD phones.

Now a China Mobile source told has told website C114 that the company would leverage its financial strengths “to stage a price war to resist Telecom’s and Unicom’s 3G” services.

China Mobile has 503 million users, Unicom 142 million and China Telecom 44 million customers. Of these 3G comprises a tiny fraction - China Mobile has 1.3 million using TD-SCDMA, Unicom 350,000 using W-CDMA and China Telecom 1.3 million on its CDMA EV-DO network.

TD-SCDMA is primed to evolve into a global standard: TD-LTE. Granted, TD-LTE's sales pitch is not all that different from its ancestors - i.e. making use of unpaired spectrum to boost capacity in urban environments where FDD macro networks get overloaded. What is different this time around is a bigger ecosystem of vendors developing it - admittedly for just a single market at the moment, but also the biggest single mobile market in the world.

The other key difference is that TDD has always been primarily a data play. But from 2001 up to 2008, 3G cellcos were still primarily in the voice business, and FDD allowed them to continue milking that cash cow. That worked fine when 3G data usage was still mostly ringtones, wallpapers and other walled-garden content.

Then the iPhone happened. Smartphones got smarter and data usage skyrocketed so high that E1 backhaul links became the new bottlenecks. If ABI Research is to be believed, by 2014 mobile users will be transmitting a total of 1.6 exabytes a month (compared to 1.3 exabytes for all of last year).

Hence all the interest in LTE, as well as related technological tricks to offload data traffic and maximize RAN capacity like spectrum refarming in the 900- and 1800-MHz bands and femtocells. TD-LTE is another tool in the toolbox, and by the time we start hitting monthly exabyte levels in five years, its predecessor in China will have been put through the ringer enough to qualify as "seasoned" if not "mature".

Of course, all that depends on a ton of factors over the next five years. Still, TDD is a lot closer to realizing its potential than it was at the start of the decade.

If nothing else, TD-LTE may have the novel distinction of being the quietest evolution the cellular world has yet seen. That will depend on how much progress Qualcomm and other chipset vendors make with dual-mode FDD/TDD chipsets, but once devices are capable of roaming seamlessly between both, TD-LTE may be the first RAN acronym that won't need to be marketed to end-users who don't give a toss what it's called anyway.

ST-Ericsson is creating a strong foothold in the evolving Chinese 3G market, and is powering the first modem for TD-HSPA, which can take advantage of the fastest speeds offered by China Mobile.

The silicon joint venture is working with Chinese partner Hojy Wireless on modules that will turn up in data cards and dongles early next year. China Mobile will hope these will boost uptake of its new network by heavy duty data users, a market where China Telecom's EV-DO system has so far shone more brightly. The M6718 modem could also be included in notebooks, netbooks and smartphones in future, as the market moves beyond data cards.

Mobile broadband modules, for incorporation in a range of devices, are an important part of the broader ST-Ericsson portfolio, with co-parent Ericsson a key customer as it bolsters its module business in 3G and LTE. The M6718 is a dual-mode TD-HSPA/EDGE device, supporting 2.8Mbps downlink and 2.2Mbps uplink.

TD-SCDMA Politics!

I posted sometime back about China Mobile standards ready to battle the 3G standards. I read this interesting piece in The IET Magazine:

The wait is over for millions of Chinese mobile phone users. Following several years of delays, the government has finally issued the licences that were necessary for the introduction of third-generation cellular services in the country.

As ordered by the Ministry of Industry and Information Technology, each of the nation’s three main operators will have to build and operate a network based on one of the three different standards that were vying for a share of the world’s largest cellular market.

China Mobile (by far the dominant carrier with over 460 million subscribers) will operate on TD-SCDMA, the 3G technology that was developed entirely in the People’s Republic by the Chinese Academy of Telecommunications Technology in collaboration with Datang and Siemens. China Telecom will run on W-CDMA, while China Unicom gets CDMA2000.

Considering how immature TD-SCDMA technology still is - and how discouraging its build-up trials have proved - China Mobile seems to have landed the worst possible deal.

Then again, that was the whole idea of this so-called reorganisation of the country’s telecoms industry. Let the incumbent cellco work on the many problems that will have to be ironed out before TD-SCDMA can be considered a credible 3G alternative, and that should give the two smaller operators enough time to catch up by taking advantage of proven technologies and an established pool of equipment suppliers.

The Chinese government wants a more balanced, more competitive telecoms market, and this should help do the trick. But the move is also likely to have some strange consequences in the relationship between mobile operators and phone makers.

China Mobile faces two different handset-related challenges when it comes to 3G. The first one is qualitative: existing TD-SCDMA phones are technically inferior to those that subscribers have been using in the rest of the world for well over eight years now. The second is quantitative: only 40 or so TD-SCDMA models exist, while China Mobile says it will need several hundred.

So the company is resorting to some unprecedented behaviour for a cellular operator. At the last Mobile World Congress in Barcelona, Wang Jianzhou, the chairman of China Mobile, met with a group of handset vendors (including Nokia, LG, Samsung, Sony Ericsson and some of the Chinese manufacturers) and offered to pay them part of the R&D costs of developing better TD-SCDMA products.

Handset makers have rarely witnessed such generous attitudes from an operator. Even rarer is the fact that the offer is coming from what is now the world’s largest operator. Add to that the unfavourable financial conditions most of these OEMs are enduring and you could safely assume they’ll go and see what they can do to help China Mobile.

You can also read about what TD-SCDMA is here. More about the current status of TD-SCDMA here.

TD-SCDMA: Where are we

Interesting things are going on in the Chinese market.

A new mobile phone platform has been launched by China Mobile for it's TD-SCDMA 3G mobile phone network. In fact, it’s the first ever mobile phone operating system designed by a 3G mobile phone operator and is called Ophone. The OPhone is a linux-based terminal software platform for mobile internet.

In conjunction with the announcement for the Ophone, China Mobile announced a number of Ophone compatible handsets from Samsung, Lenovo, Phillips and Dell.

China Mobile stated that by introducing the Ophone operating system, significant savings will be made on TD-SCDMA handset design and development.

"Dopod CEO Dennis Chen said the Qilin handset is the first result of China Mobile's $7 million in subsidies to encourage TD-SCDMA handset development. Dopod has expanded investment in manpower and funding towards TD-SCDMA R&D and will release numerous high-end TD-SDCMA (sic) handsets next year."

The HTC Qilin has some pretty good genes: WM 6.5, 600MHz TI OMAP processor, 3.6" WVGA screen, GPS, 5MP camera, and CMMB Mobile TV and is apparently based on HTC's Whitestone design. The TD-SCDMA standard is China's home-grown 3G standard, which means that the Qilin won't have access to 3G networks outside of China. Having said that, HTC and China Mobile have just signed an MOU to partner up in R&D, market research, and product development, so the Qilin will be just the first in a series of handsets HTC will develop for China Mobile.

The Qilin is slated for release in December, which puts it just in time for runup to the Chinese New Year holidays.



China Mobile and LG have recently showcased the GW880, LG’s first smartphone to use the Android-based OMS (Open Mobile System) platform.

Featuring GSM and TD-SCDMA connectivity, the LG GW880 will be available via the largest Chinese mobile carrier later this year, for a price that was not announced.

The smartphone is a high-end one, as it comes with a 3.5 inch WVGA touchscreen display, 5MP camera with flash, Mobile TV, 512MB ROM and 256MB RAM.

We’re probably not going to see the LG GW880 outside China, but that’s OK, since LG is surely preparing some Android phones for other markets.

China Mobile saw its number of TD-SCDMA subscribers increase by 129,000 to 1.088 million in July. The first batch of handsets were released in May.

Nearly one half billion people subscribed to China Mobile cellular services last month, but the giant's efforts to promote a Chinese 3G standard have made little headway. The world's largest carrier grew to 498 million mobile subscribers last month, a number larger than the populations of the U.S. or the European Union. The number of subscribers using their mobile phones to play games, download music and surf the Internet also rose during the first half of the year, China Mobile said Thursday. But growth was slow for TD-SCDMA, a domestic 3G mobile standard that the government tapped China Mobile to market. Subscribers surpassed 1 million in July, continuing a slow climb upward from the launch of TD-SCDMA services in January.

China Mobile Communications Corp. aims to have as many as 80 million users of its homegrown third-generation mobile technology within two years of its initial rollout, Minister of Industry and Information Technology Li Yizhong said. Speaking at a news briefing, Li acknowledged the domestic standard isn't as developed as its more mature international rivals, but said he is confident in its commercial development.

Shanzhai Mobile Phones: 'Bandit Phones' or 'Fake Phones' from China's Wild West

Have you heard of these brands called NokLa, Samsung, Nukia, HiPhone, etc. ? These are the 'fake phones' manufactured in China.

In 2008, an estimated 150 million, or 20 percent, of the 750 million handsets produced in China were either counterfeit or off-brand phones, according to CCID Consulting, a market research firm based in Beijing. Of those, over 51 million were sold in China while the remainder were sent to foreign markets.

Known here as "shanzhai ji", or bandit phones, China's gray market handset industry was virtually non-existent just a few years ago. While a handful of illegal companies produced black market mobiles, they often were of poor quality mainly because the technology needed to make them was hard to come by and even harder to master.



This all changed in 2005 when Mediatek, a microchip design company from Taiwan, developed what experts call a turnkey solution -- a platform that integrated many complex mobile phone software systems onto a single chip. This made it much easier and cheaper to build handsets and churn out new models at astounding speeds.

"[Mediatek] basically commoditized the entire market," said Jonathan Li, founder of Shanghai-based technology design studio Asentio Design. "They made it really simple and really cheap to make your own phone. Almost anybody could do it."

The shanzhai business got another boost a couple of years later when the Chinese government relaxed regulations limiting the number of companies that could manufacture handsets, lowering the entry barrier for hundreds of entrepreneurs eager to have a piece of the world's biggest mobile phone market.

"It is so easy to do because this whole ecosystem is in China," said Weaver. "It isn't so complex for a guy to figure out by watching how the global supply chain works in the mobile handset space to do his own thing."

By 2008, an estimated 3,000 to 4,000 shanzhai businesses had emerged, many with fewer than a dozen employees operating in offices sometimes comprised only of a back bedroom in a small apartment or basement of a private home. Some blatantly copy major brands, producing knock-offs with slight twists in their names, others come up with special makes of their own.
Either way, the shanzhai phenomenon has not gone unnoticed by legitimate handset manufacturers. The gray market phones, which typically sell for around $100, have already driven down the prices of brand name mobiles and are beginning to take away their market share, too.

"You cannot compete with them. You can't," said an employee of Chinese telecom equipment maker Huawei Technologies who spoke on the condition of anonymity. "It is almost impossible to make a profit [from handsets] now because of shanzhai."

Some manufacturers, like Nokia, say they are working with the Chinese government to crackdown on the counterfeiting companies as well as raise awareness about the potential dangers of the fake phones, some of which have had exploding batteries or expose consumers to abnormal amounts of radiation.


The market for Shanzhai cell phones lies not only in China, but also in the surrounding developing countries in Asia or even third world countries in Africa and Latin America. They identify overlooked/underserved market segments by incumbents like the rural areas and focus on these segments. The outstanding sales performance of Shanzhai cell phones is usually attributed to their low price, (usually lower than $50), multi-functional performance and imitations of trendy cell phone design. Although Shanzhai companies do not use branding as a marketing strategy, they are known for their flexibility of design to meet specific market needs. For example, during Barack Obama’s 2008 U.S. presidential election campaign, Shanzhai cell phone companies started selling “Obama” cell phones in Kenya, with the slogan “yes we can” and Obama’s name on the back of the cell phone. They also designed “Bird Nest” and “Fuwa” cell phones in light of the Beijing Olympic Games.
Who gains from Shanzhai Phones?
None of the stakeholders seem to gain from these low quality phones.
The phones are low in quality and do not necessarily follow the safety standards. Most of the times, the radiations from these phones are beyond the permissible limits and can cause serious damage to the health of the consumer. The FCC has adopted limits for safe exposure to radio frequency (RF) energy. These limits are given in terms of a unit referred to as the Specific Absorption Rate (SAR), which is a measure of the amount of radio frequency energy absorbed by the body when using a mobile phone. The FCC requires cell phone manufacturers to ensure that their phones comply with these objective limits for safe exposure. Shanzhai phones do not follow the SAR norms.
Most of the Chinese handsets have dual SIM slots and allows the consumers to put SIM cards of two different operators. This means that operators would have to share their ARPU with other operators and the competition would lead to lower ARPU and multiple SIM phenomena
The Shanzhai phones do not pay any taxes of regulatory fee resulting in revenue losses to Governments across the world wherever they are sold. Even the Chinese government is in a fix now as the exports benefits given out to these handsets are over claimed. Moreover, since the Shanzhai phones do not have an IMEI number, there is an increased threat from terrorists as it is very difficult to catch a terrorist who uses a mobile handset without IMEI
According to Taiwan's National Communications Commission, people who sell or buy "Shanzai" mobile phones via the Internet or in electrics marts will face a fine of up to NTD300,000, which is about CNY60,000, in Taiwan.
According to reports in Taiwanese local media, NCC recently stated that under the Administrative Regulations on the Controlled Telecommunications Radio-Frequency Devices, Taiwan residents should bring no more than five "Shanzai" mobile phones from the overseas markets at one time and the number should be limited to two if the mobile phones are sent by post.
According to reports in Indian local media, the India government has decided to set stricter quality limits to imported mobile phones, dairy products, and toys and these measures reportedly target China.
The reports quoted the director of the Foreign Trade Bureau of India by saying that from now on, mobile phones without International Mobile Equipment Identities should not be imported to the Indian market, which means Chinese-made "shanzai" mobile phones will not be available in the country.
Check out some more photos here and here.

LTE Subscribers forecast and market movements

A report last year mentioned that the number of LTE subscribers by 2013 will be 85 million but a new report from research firm Forward Concepts, which looks at trends including 3G evolution and handset shipment growth, claims that the number of LTE users will be 56 million by 2013.

According to the report, HSPA+ will begin to displace W-CDMA and HSDPA technologies, and the first LTE devices to hit the market in 2010 will be data cards and dongles.

The Forward Concepts study also takes a look at some other trends in the industry. The firm predicts that global handset shipments will be down this year, and forecasts a 4.4 percent contraction. The report predicts a resurgence in unit shipments in 2010, however, and calls for a 12.8 percent growth in shipments. The one bright spot for 2009 is smartphones: Forward Concepts predicts a 25 percent jump in smartphone sales.

LCD display technology also will come under pressure from other technologies, including OLED, ePaper, Qualcomm's Mirasol and Liquavista, according to the report. The market for these "post-LCD" displays will grow to over $3 billion in 2013, the report said.

On the operator front, NTT DoCoMo is sticking to its plan to be a first stage deployer, with first roll-out in 2010, while work has begun on outdoor testing of the TD-LTE technology that all three Chinese carriers will use.

DoCoMo chief Ryuji Yamada told the London Financial Times that the cellco has not gone cool on its 2010 timescale. The firm needs to enable new services to respond to UQ's aggressive launch of mobile broadband offerings based on WiMAX, and to stay ahead of established rivals KDDI and Softbank, and the disruptive and data-driven newcomer eMobile. Yamada said DoCoMo wants to be "in the leading group in this technology", and that he sees a move to LTE as a way to be fully compatible with global standards, which will improve device economics. In 3G, DoCoMo moved so early that it deployed a pre-standard implementation of W-CDMA, FOMA. This is now used by 91% of its base, with over 50m subscribers after almost eight years in commercial service, but it has two downsides that will drive DoCoMo to LTE early - over-dependence on Japanese handset makers, with the high costs of slightly off-standard devices; and networks that are older than those of newer cellcos and in areas are becoming obsolete.

The Chinese operators have similar dilemmas, especially China Mobile, which is stuck with an off-standard 3G technology, TD-SCDMA, and wants to move quickly to a platform that brings global economies of scale and allows it to be more cutting edge in services. While it may have virtually no opportunity to get ROI on its 3G spend, it aims also to be in the first group of LTE deployers, though it will be using the TDD strain of the standard.

Earlier this year, it took over the trial sites in Spain that had previously been used by Vodafone and Verizon Wireless for FDD-LTE, and is now reported to be moving this initial test program to China and towards more real world outdoor trials. Sources say these outdoor tests could also involve other Chinese operators, and will involve six vendors working in the Beijing area. Surprisingly, if the insiders are right, these vendors do not include Motorola, which has been the main supplier in the Spanish project, and claims it has a major headstart in TD-LTE because of its extensive experience with TDD mobile broadband, using WiMAX. But the new Chinese tests involve four homegrown vendors (Huawei, ZTE, Datang and Potevio, the latter a Nokia venture) plus Ericsson and Nokia Siemens. The inclusion of more CDMA-oriented suppliers, notably Motorola and Alcatel-Lucent, is likely to follow when CDMA carrier China Telecom starts its own TD-LTE tests.

The testing process determined by the TD-LTE Working Group has three stages - indoor, outdoor and large-scale outdoor testing, the last of these involving two or three major cities with at least 100 base stations each. The local vendors have already been working on indoor testing in China since the start of the year.

Via: LTE Watch, Rethink Wireless and Fierce Wireless.

LTE activity gathering pace

Wireless internet access is going to be a better, richer experience than fixed link access Professor Michael Walker, group R&D director at Vodafone told Wireless 2.0 conference in Bristol, organised by Silicon South-West.

“People think wireless can’t compete with fixed link, but it can”, said Walker, pointing out that the 100Mbit/s of FTTH is the same as the theoretical maximum throughput of LTE.

“LTE capacity on 20MHz is an order of magnitude higher than HSPA,” said Walker. He said that, “in the first real field trials,” average downlink speeds of 15Mbit/s, with 4.5 spectral efficiency, were achieved. “Wimax takes three times more spectrum”, he said.

“We decided with LTE that we would make sure the technology works before we buy spectrum,” said Walker.

To that end, Vodafone has been working with China Mobile and Verizon to make sure LTE has compatible standards.

Walker regards talk of a killer app as silly for LTE as it was for 3G. “LTE is just about access,” he said.

He predicted the gradual relative demise of the person-to-person phone calls, referencing data that showed 11 times more wireless traffic is being generated by community chatting than by person-to-person calls.

Ericsson, one of the world’s leading suppliers of mobile phones and related network solutions, has warned that it could be 2012 before the first true next generation Mobile Broadband networks gain a good foothold in the UK. The deployment of Long Term Evolution (LTE) technology (aka - 4G), which could deliver download speeds of 150 to 1000Mbps, is being hampered by problems with releasing the needed 900Mhz spectrum.

Presently both O2 and Vodafone own some of the older 2G (900MHz) spectrum, which Ofcom is seeking to have redistributed to rival operators ( Orange , T-Mobile and Three (3) ). This could then be converted for use by 3G/4G voice and Mobile Broadband technologies, such as HSPA and LTE .

Nokia Siemens Networks (NSN), although providing WiMAX solutions for Taiwan operators, plans to launch commercialized LTE (Long Term Evolution) solutions in 2010, Mike Wang, NSN's general manager for Taiwan, Hong Kong and Macau.

NSN has already received LTE solution orders from Japan-based NTT DoCoMo, which is expected to start offering LTE-based services in 2010, Wang stated.

In addition, NSN has also landed orders for the installment of LTE trial networks for T-Mobile and Singapore-based service provider Mobile One, he added.

LTE-enabled chipsets are expected to hit the market starting in the second half of 2009, followed by LTE USB modems and network cards in 2010 and other LTE CPE such as handsets, PDAs, tablet PCs in 2012, Wang predicted.

Japan's DoCoMo is reported to be planning an investment of ¥ 343 billion (US$3.4 billion) for the investment, while KDDI and Softbank Mobile have budgeted ¥ 515 billion and ¥207.3 billion, respectively. According to the Nikkei newspaper, among the four, LTE services are forecast to attract around 36 million subscribers, with DoCoMo projecting 17.74 million LTE customers.

The total investment will top ¥1 trillion (US$10 billion)

DoCoMo, KDDI and Softbank Mobile expect roughly 30% of their existing customers to switch to 3.9G services. DoCoMo is also reported to be expecting to upgrade or deploy some 20,000 LTE enabled base stations by 2014. The network should cover 50% of the population and commercial services will start in 2010.

LTE provides downlink peak rates of at least 100Mbit/s, 50 Mbit/s in the uplink and RAN round-trip times of less than 10ms. Fujitsu recently announced that, in collaboration with NTT DoCoMo, they had successfully completed field testing for LTE, using 4x4 MIMO technology, which resulted in data transmission speeds in the range of 120 Mbps (using 10 MHz bandwidth) in Sapporo's urban environment.

NTT DOCOMO has selected Alcatel-Lucent' Ethernet transmission solution to provide the backhaul network of its Long Term Evolution (LTE) service. Financial terms were not disclosed.

Alcatel-Lucent said its packet optical gear will provide NTT DOCOMO with cost-effective and flexible Ethernet-based aggregation and transport from the base stations to the core network. Specifically, the Alcatel-Lucent solution, based on the 1850 Transport Service Switch (TSS) and its universal switching technology, will provide multipoint Ethernet connections between cell sites supported by strong operations, administration and maintenance capabilities, as well as carrier-class protection and network management.

China Mobile Ltd., recognizing that future growth of its 3G services is not yet certain, is looking to secure its future with a nearly parallel development of Long Term Evolution (LTE) capabilities, according to its annual report filed with the Securities and Exchange Commission (SEC) recently.

High on the list of limitations TD-SCDMA imposes are the availability, functionality, and price of terminals, and the support for international roaming. The latter particularly impacts China Mobile's high-end and business customers.

China Mobile remains committed to TD-SCDMA, but at the same time it's going all out to develop converged time division duplex (TDD) and frequency division duplex (FDD) products for LTE, the proto-4G wireless technology set to be deployed by mobile operators worldwide.
Developing a simultaneous LTE strategy will enable China Mobile to limit the time it is dependent on TD-SCDMA, and also help it counter the constraints it's currently experiencing as a result of the TD-SCDMA sector's limited ecosystem.

The Chinese vendors have labored too long under the market perception that they deliver low cost equipment, but can't do cutting edge. To fight this image and enhance their position among tier one carriers, Huawei and ZTE are throwing everything - including their huge credit lines for vendor financing - at gaining early LTE trials, which puts them in the spotlight even if commercial roll-outs are often two years or more away. The latest points go to ZTE, which has won field trial contracts with Telefónica in Spain and CSL in Hong Kong.

This comes shortly after Huawei highlighted its LTE deal with Netcom of Norway, and the Chinese duo are, early market estimates indicate, coming close to Ericsson in terms of their penetration of stage one LTE trials - and ahead of Alcatel-Lucent and Nokia Siemens.

Telefónica confirmed reports by Light Reading that ZTE's trial will take place in the third quarter. While success at the Spanish firm may not translate into meaningful revenue any time soon (and Ericsson has already conducted LTE trials with Telefónica too), it will still be a major boost for the vendor. It has not been as successful in getting tier one western carrier deals as its compatriot - although its overall wireless equipment market share grew at a similar rate to that of Huawei in the past 12 months, its base is far more concentrated on the lower margin developing markets.

By contrast with Telefónica, CSL is already a major customer for ZTE and one of the first commercial users of its software defined base station platform, which it is currently rolling out in an IP-based HSPA+ network across Hong Kong. In a recent interview with Telecoms.com, Tarek Robbiati, CEO of the Telstra subsidiary, said: "Further consolidation will come in the next three to five years. In the end there will be only three [infrastructure vendors] left, and two of them will be Chinese. The European vendors are just too slow."

With LTE firmly at the top of the hype curve in 2009, WiMAX is somewhat overshadowed in the headlines, but did make a strong impression at last week's CommunicAsia show in Singapore, highlighting how the technology has gained a higher profile in Asia than in Europe - because of the importance of the Taiwanese ODMs and vendors like Samsung, as well as a large number of deployments in countries like Japan, Vietnam, Korea and Taiwan.

TD-SCDMA ready to battle other 3G standards

Even though LTE standards have been released recently, China Mobile will be rolling out the pre-LTE, TD-SCDMA technology soon. The TD-LTE flavour of LTE will eventually supercede TD-SCDMA probably in couple of years.

China Mobile has decided to launch TD-SCDMA mobile handsets which will procured from three manufacturers. The telco has selected LG Electronics, ZTE and Yulong Computer Telecommunication Scientific (Shenzhen) as the suppliers of handsets. The manufacturers will offer four types of TD-SCDMA handsets to China Mobile of which two will be produced by Yulong Telecom. China Mobile will also keep aside CNY 650 million to finance TD-SCDMA terminal manufacturers’ R&D. The first batch of these handsets is anticipated to enter the market before 17 May.

By far, China Mobile has completed the second-phase TD-SCDMA network construction in 28 Chinese cities. And the batch of service-built-in mobile phones are expected to enter the market before May 17, 2009, when the three mobile telecom operators start full 3G services. In fact, China Mobile has put great efforts into TD-SCDMA terminals, in order to make a hit in the coming Chinese 3G telecom epoch.

Days ago, it announced the list of 29 types of TD-SCDMA service-built-in netbooks. Such netbooks with six brands like Lenovo, Dell, Haier, Founder, HP will be exclusively sold by the telecom operator. Earlier, it disclosed that it would set aside CNY 650 million to finance TD-SCDMA terminal manufacturers' R&D.

In addition, China Mobile plans to set up a TD-SCDMA industrial park in the eastern Chinese province of Zhejiang before 2011, involving a total investment of CNY 1 billion, said one of its executives.

In the first quarter of 2009, the company achieved operating revenue and net profit of CNY 101.269 billion and CNY 25.201 billion, up 9.2% and 5.2% year on year, citing its financial report.

By the end of March, the number of its subscribers had reached 477.16 million, representing a slowed growth of 19.91 million, due to a demand drop caused by the decelerating macroeconomic, squeezed space for mobile telecoms popularity increase, and intensified competition after a far-reaching asset reshuffle among the country's telecoms operators.

Besides, its average revenue per user (ARPU) was CNY 73 in the first three months, down CNY 10 from a quarter earlier, because of an increase in low-end users and application of a new charging plan.

This week, China Mobile Ltd announced the result of its third-round TD-SCDMA equipment bidding with a total contract value of RMB 8.6 billion, sources reported.

A total of eight companies won contracts in this round of TD procurement, including six domestic companies and two foreign firms.

Datang Telecom Technology Co Ltd and Alcatel Shanghai Bell Co Ltd together won a 23% share of the bidding. Huawei Technologies Co Ltd and ZTE Corp, two leading providers of telecommunications equipment and network solutions in China, won 20% and 18% respectively.

Meanwhile, another three domestic vendors, namely New Postcom, Fiberhome Telecommunication Technologies and Putian Group, won a combined 29% share of the bidding.
Nokia Siemens Networks and Ericsson Inc each took a 5% share of it.

China Mobile earlier said it plans to build TD-SCDMA networks in 200 Chinese cities by the end of this year.

Analyst Zhang Jun of China's Web MKI told PC World that China Mobile is currently evaluating phones from Dell, with a view to creating a co-branded product running the cellco's own software platform. The largest Chinese mobile operator is determined to retain the upper hand in the balance of power and brand with handset makers, and to take a Japanese-style level of active involvement in development. In particular, it has said it plans to create its own software platform, called Open Mobile System (OMS), based on Android but with specific operator variations at all layers, and it will also open an applications store to support this.

Such a scenario clearly requires one or more biddable handset partners, and Dell could well step in, alongside various Chinese suppliers, since it would gain such a major springboard for the mobile market via Mobile's huge user base. It would not only have to support the China-specific operating system, though, but would also have to incorporate the TD-SCDMA 3G standard, as well as GSM. Dell will also offer a TD-SCDMA netbook with the launch of its Inspiron Mini 10 in China this week.

According to Zhang, other vendors working on TD-SCDMA/OMS phones include Huawei, ZTE, HTC and Lenovo. The last of these should get to market first with the so-called OPhone.

Finally, Samsung Electronics intends to introduce its 3G mobile phones in China. The fifteen 3G mobile devices are part of the company’s new products in the second quarter. Products based on China’s TD-SCDMA standard include the B7702C dual-mode handsets, digital TV handsets, multimedia handsets and fashionable handsets. Products modified for China Unicom include the S7520U HSDPA-supported high-end multimedia mobile phones, online movie, internet, and music-supported mobile phones. The mobile phones customised for China Telecom include the W709, the M609, the W239, and theF539 models.

Free TD-SCDMA phones with Mobile TV

China Mobile, the nation's largest mobile carrier, is to purchase around 40,000 TD-SCDMA mobile television phones tailored for China Mobile Multimedia Broadcasting (CMMB), Chinese telecoms equipment provider ZTE Corporation disclosed on July 8.

A handful of telecoms terminal providers including ZTE and Qualcomm Incorporated are preparing for the purchase. These mobile phones are scheduled to be offered to friendly users during the 2008 Beijing Olympic Games in August. Their wider usage is expected to come after the Olympics.
The Chinese telecoms authority has approved the market access of CMMB mobile television phones in the country. In fact, China Mobile is busying itself in furthering the mobile television phone technology - TD-Multimedia Broadcast Multicast Service (MBMS), and it plans to widely promote TD-MBMS mobile television phones after CMMB ones.

The State Administration of Radio Film and Television of China (SARFT) is designed to start commercial CMMB service in 37 capital cities across the country before the Olympics. So far, close to 30 cities have finished building the networks.


See Also:

• China starts CMMB Mobile TV trials
• Beijing Olympics Organizing Committee gets free 3G phones from China Mobile