TD-SCDMA is an alternative 3G radio technology developed by the Chinese, who held back from issuing 3G licences until their own technology variant was ready to take to market. There have been several attempts at national variants of cellular radio technology, including PDC (an adaptation of GSM popular in Japan), iDEN (also shares the same GSM core network, using by Nextel in the US and several other operators worldwide to provide a push-to-talk walkie-talkie type service). The lesson learnt is that market domination of a common standard can win for all parties by providing wide range of handsets and equipment at lower prices through competition and large market size.
For example, the annual spend on mobile telecoms infrastructure is some $58 billion. GSM and UMTS (its 3G brother) takes the lions share of this, with over 87% of all mobile phone subscribers using the technology.
Digimoc, a Chinese vendor, has announced development of their TD-SCDMA femtocell , which would be sold to China Mobile, the only TD-SCDMA network operator in the world today. Their product is based on picoChip's reference design, using their PC202 chipset.
With China Mobile having over 400 million subscribers, and healthy levels of internet broadband penetration in China, the market may seem attractive. But takeup of TD-SCDMA may not be as rapid as expected - while the Chinese government has given China Mobile a target of 100 million users by 2012, analyst EJL predicts 12 million TDS-CDMA user in that timeframe.
Compare that with sustained monthly increases of between 7 and 9 million GSM subscribers in China today. Voice coverage in China, especially in urban areas, is generally pretty good (China Mobile run a very good network). Broadband USB data dongles have been available for a few years using the competing CDMA network run by China Unicom, which had spare capacity because of lower takeup of voice users.
It's noticeable that Huawei and ZTE, the two best known and largest Chinese cellular vendors, are not announcing femtocell products for this technology as yet. They appear to be focussing their efforts on the global market for HSPA devices today, which address a larger market size.
So the business case for TDS-CDMA femtocells in China may be more about providing always-on, widely available data service to the new range of data centric smartphones. Improved performance is likely due to the short range. China Mobile themselves may find it useful to deploy these femtocells for hotspot coverage, rapidly rolling out targetted coverage in exhibition halls, conference areas and similar high traffic areas. With this in mind, we would guesstimate femtocell sales volumes of a few hundred thousand units by 2013.
We still think it unlikely that TD-SCDMA technology will be exported to many other countries. It would compete with the mature and widely available HSPA and WiMAX technologies, with LTE coming soon. Those that do use it outdoors are unlikely to have significant wired broadband and so the basic requirements of femtocells would not be present.
Chinese industry is also heavily involved in a TDD variant of the LTE standard. The main FDD version of this 4G technology has already been demonstrated by vendors, and has the backing of large operators including Vodafone, Verizon and China Mobile.