Yang Hua, secretary-general of the TD-SCDMA Industry Alliance, has put forward some arguments that 3G will go better in China than in the west because of cultural differences. Reading his conclusions, I can’t help but think he’s clutching at straws in a bid to convince the Chinese government to get on with it and issue 3G licenses. His arguments, as reported by TelecomAsia, are summarized below.
-- China has scale. Handset penetration is under 50 percent so there’s still room to grow, and anyway 20 percent of people are replacing their phone each year so 3G will have “a starting point of more than 100 million”.
-- The boards of western carriers are capitalists while the boards of Chinese carriers are telecom experts. As a result western carriers go for “hotspot coverage” while Chinese carriers aim for total coverage as a way to achieve a good market return.
-- Cultural differences… “Europeans and Americans sought practical and functional applications, while Chinese looked for “fashion”.

These arguments are pretty laughable. For the first one, it’s easy to point out that westerners update their handsets at a pretty fast rate too, but they don’t update to 3G handsets all that often and there’s no reason to think Chinese will be any different. For coverage, it’s true that the government could mandate greater coverage and there are good reasons for doing so, but arguing it is to get a good market return is disingenuous—if it did all carriers would do it. As for cultural differences, this had me laughing the loudest. It’s obvious there are cultural differences, and I’ll state up front that I’m not an expert in the relative cultures of the US, Europe and China… but a couple of years ago there was a handset that was so successful people started saying that manufacturer would soon dominate the handset industry. Remember the Razr? A huge success because it was slim and viewed as fashionable.

The sad part is that there are reasons why 3G could take off in China, if the government ever got around to issuing licenses. It’s more efficient at using the spectrum so it’s cheaper, which is always attractive. The mobile phone is likely to be the primary computing device and possibly the primary phone for a significant number of Chinese (something Yang touched on), which means they’ll see comparatively more benefits to getting a good connection. Also, if the carriers are still rolling out the network in rural areas of the economy they wouldn’t be replacing a preexisting network but putting in a new one, where they need to do it anyway. So they avoid double-costs (although I’m of the opinion China should skip 3G and go to the next level). I’m sure there are some other reasons, but my point is that you don’t need to make them up.