But an intellectual property spat looms

China will soon start tests of its own 3G technology, government-linked sources in the country reported today. Completion of the tests is seen within the industry as a prerequisite for the start of 3G services in China.

A Chinese mobile service provider also plans to test the nation's home-grown TD-SCDMA technology in the semi-autonomous Chinese city of Hong Kong.

The test will be partially funded by the Hong Kong government, and in cooperation with local companies, the Beijing Morning Post reported, according to Pacific Epoch.

However, with stronger intellectual property rights protection than mainland China, Hong Kong is a potential battleground for challenges to China's TD-SCDMA from foreign CDMA patent holders like Qualcomm.

Recent reports confirm that Qualcomm is aleady issuing licences and accepting royalty payments for TD-SCDMA implementations elsewhere.

"If TD-SCDMA is commercially deployed, licences to Qualcomm patents will be required since our patents are essential to the TD-SCDMA standard," Qualcomm president, Steve Altman, warned in an analyst meeting last year.

Separately from the proposed Hong Kong test, three cities around China have been chosen as locations for test networks by the government, said a report from the semi-official Xinhua News Agency, citing unidentified sources close to the Ministry of Information Industry.

China's homegrown 3G technology, TD-SCDMA, is not expected to be ready for commercial service before the end of this year.

Some local service providers have expressed reluctance to use the locally developed standard, saying they prefer the older foreign-developed W-CDMA and CDMA2000 technologies.