According to CMCC’s planning, TD-SCDMA network will cover 238 cities after the 3rd phase bidding has been finished. This time procured equipments mainly used on 200 cities, plus the 38 cities’ TD-SCDMA equipments procured in previously two phase bidding, TD-SCDMA network will be available in totally 238 cities.
Although the 3rd phase TD-SCDMA Network Equipment bidding result is unrevealed till now, there are some features have been presented.
Significant Cost down of TD-SCDMA Network Equipment
Source reported that CMCC expect to purchase 39,000 wireless BSs, equivalent to 260,000 wireless Carrier Sectors, which is roughly 1.6 times of available network equipments number in 2nd Phase bidding.
Currently there are 8 manufacturers involved in the 3rd phase bidding including: china native venders ZTE, Huawei, Datang, Putian, Fiberhome and New Postcom, and the foreign venders Ericsson and Nokia Siemens.
In the 1st and 2nd phase network equipment bidding, the china native manufacturers took more than 80% share of the bidding.
According to the offering result, generally all the offering prices are lower than that in the second phase. Over the past 20 years, with the influence of scale effect, technological progress and competition, the total cost of the telecommunication construction decreased by at least 10 times. Experts point out that the prices decline means that TD-SCDMA industry has entered into the mature market stage.
Analysts pointed out that the offering price from 8 network equipment manufacturers are lower than the offering prices at 2nd phase, that primarily benefit from the technology improvement, higher integration and large-scale procurement.
Comparing to the latest bidding of GSM equipments in year 2009, the minimum price reached RMB 14,000 yuan for each carrier, convert to the cost of unit frequency bandwidth, it is shown that the cost of TD-SCDMA equipment in the 3rd phase bidding roughly lower than GSM equipments’ prices about RMB 3000 yuan on each carrier.
Analyst of Shenyin Wanguo securities company, Fanglu said that although the offering prices from ZTE and Huawei are lower than other companies, but the companies’ mass profit are still considerable because of the large scale efforts.
Win-Win on scale and the cost
Disclosed by insiders of CMCC, with the pressure from competitors, market scales of TD-SCDMA network equipments sharply increase from its inception 300,000 carriers to finally 1000,000 carriers.
April 16, China Telecom plan to launch their 3G business in 120 china cities. Before the end of year 2009, China Unicom plan to launch the WCDMA network business in 282 china cities.
Scale of TD-SCDMA market almost has been doubled, but the overall cost has not significant increase. The reason is China Mobile adopt the large scale strategy in 3rd phase equipment bidding, compared with the most base station’s configuration are s222 and s333 in 2nd phase bidding, the primarily base station’s configuration are s444 and s888 in 3nd phase bidding. This strategy will bring the significant cost down for each carrier / sector because of the number of carrier increasing in each sector.
The telecommunication specialist Li Jinliang said, in early stage of TD-SCDMA system construction, the coverage for each cell will be larger, so that the number of base station can be decreased. Additional considering TD-SCDMA system’s special highlights, such as almost same coverage for different services, almost no respiratory effects for vary network load, richness on frequency band wide, the higher frequency efficiency and the combination of software radio technology, it is make TD-SCDMA system can provide flexible support for vary service configurations and network capacity expansion.
TD Industry Alliance (TDIA) plays an important role for the cost down of TD-SCDMA system equipments. TDIA members can share the benefit of TD related new technology.
Another reason of low cost is because of sharing the same platform for different product lines inside one company. Many companies such as ZTE and Huawei have the ability to launch GSM / WCDMA / CDMA2000 /LTE network equipment products based on fewer standard platforms, in this way the R&D cost for each product can be extremely reduced, as well as the production cost can also be directly reduced because of it is most likely to adopt the same electronic elements for different products.
