Maverick China Research

Rumors on the Chinese net (examples here and here) are implying that KongZhong is involved in dealings to profit off unused TD-SCDMA credit.

According to these reports KongZhong is buying the remaining value from expiring trial TD-SCDMA accounts on a grand scale. These accounts were given free to users of China Mobile's newly launched TD-SCDMA commercial trials and were usually valued at RMB 800.

KongZhong is rumored to use the remaining balance in each account to purchase its own WVAS (wireless value-added services) products through China Mobile. The rumors state that KongZhong has spent millions of RMB buying these expiring accounts; the following diagram provides a simplified explanation of how this scheme works.

For several years the official launch or the trial launch of TD-SCDMA and the subsequent 3G licenses issuance has been "right around the corner". Currently it seems like the technology is actually ready.

But in order to offer a bit of perspective, we have collected a few examples of past announcements that turned out to be well off the mark.

BOCOG has confirmed earlier reports that TD-SCDMA will be used during the 2008 Olympics:

News reporters, athletes and attendees will all be able to take advantage of 3G telecommunications at the Olympics, said Susan Li, deputy division chief in the technology department’s telecommunication division at BOCOG.

 

“This is no easy task,” she said, “considering the Olympic Games are spread through 31 venues, including several outside of Beijing.”

BOCOG had already partnered with China Mobile to provide GSM (Global System for Mobile communications) and WLAN (wireless-LAN) services at Olympic buildings and venues. But now China Mobile has committed to providing 3G services at the Games, she said.

Bragging about having TD-SCDMA at "all 31" venues is a far cry from some of the predictions for TD-SCDMA from just a few years ago.