China Mobile has admitted that the country’s homegrown 3G technology TD-SCDMA is problematic and “a few years behind” rival standards WCDMA and CDMA2000 1xEV-DO, reports the Financial Times (FT). Earlier this week China Mobile – the world’s largest operator by subscribers – revealed it is to extend its trial deployment of 3G TD-SCDMA networks to 38 cities by the end of next June and is expected to be awarded a future license by the government to use TD-SCDMA technology for its nationwide commercial 3G launch. China Unicom is expected to be awarded a license based on WCDMA technology, whilst China Telecom is tipped to use CDMA 2000 technology. “[TD-SCDMA’s] network operation is normal but there are still a lot of problems,” said Wang Jianzhou, China Mobile’s chairman and chief executive, according to the FT report. “Problems remain in handset choices, quality, performance and prices, where most users complained… Compared with other 3G technologies, TD-SCDMA is still a few years behind.” Yesterday it was reported that Mr Wang said the operator had borne its fair share of national social responsibility by developing and promoting TD-SCDMA networks.

China Mobile’s dependence on TD-SCDMA is believed by analysts to have contributed to a 6.3 percent fall today in the company’s stock, despite a better-than-expected 45 percent jump in first-half net profit reported yesterday. “In view of the lagged development of the TD-SCDMA market, China Mobile would be at a disadvantage in competing with its rivals with matured 3G technology in the 3G market in China in our view,” MarketWatch quotes DBS Vickers analyst Steven Liu as stating in a report. Lehman Brothers analysts also noted that greater competition from China Unicom and China Telecom, following the country’s industry restructuring, also pose a threat to China Mobile’s earnings growth.