Column China has just awarded 3G contracts - three of them. The numbers of subscribers there already is huge, with ten times as many mobile subscribers as there are people in the UK, and twice as many as there are people in the US. But China's decision to bless three different technology standards is a puzzling one.

Operator China Mobile gets TD-SCDMA, the uniquely Chinese standard, China Telecom gets Qualcomm’s almost as proprietary CDMA-2000, and China Unicom the WCDMA we all love and use. It's like betting on three horses in a race - you know that you are going to have more losers than winners.

As a quick rundown, it’s bad news for Nokia, which is great at cheap GSM phones and will see that market eroded. Nokia is good at WCDMA, but has its opportunity curtailed as it is weak on CDMA-2000, while TD-SCDMA is new and a level playing field for all entrants. Of course, that’s what the Chinese government wants: to help domestic manufacturers.

The real handset winners will be Samsung and LG who have the CDMA experience and have shown TD-SCDMA handsets. Nokia has said it will produce TD-SCDMA, but hasn’t shown anything yet. China Unicom will have the benefit of a very much broader choice of handsets and more price competition. It’s not just handsets, it’s laptops with built-in connectivity, USB dongles, netbooks, sat navs and whatever else has connectivity. The biggest loser, however, will be China.

We’ve seen from the last big experiment in multiple standards that competition doesn’t always lead to more choice and lower prices. That experiment was the US - the place that leads in technology, internet and computer design, yet trails in mobile phone technology. US phone websites constantly bemoan the lack of availability there of the cool phones we have in Europe. It’s ironic comparing US legislation with China, but the way the US awarded contracts led to a mess of technologies: AMPS, TDMA, CDMA, GSM (at new frequencies) and iDen, made network roll-out expensive.

America, like China, is a big place and as a result coverage is unreliable. It also makes networks more demanding of RF performance from the phone. With each major carrier using its own, incompatible air interface, there is no opportunity for network sharing. The top reason for someone churning is poor coverage at home. The US has very high churn rates and penetration is lower than most Western countries, at 82 per cent of the population. Replacement rates are also slower.

USA today, China tomorrow?

The US is the only place in the world where the carrier's (network) brand is more important than the handset. People buy a Verizon, Sprint or T-Mobile phone rather than a Nokia, Samsung or Sony Ericsson. A couple of exceptions are the iPhone and the RAZR. The number of SIM-free phones is insignificant. China is setting itself up for the same situation.

TD-SCDMA might be aimed at protecting the home market and driving innovation, but it could have the opposite effect. The different technologies led to interworking problems. US text messaging is still behind most other countries. The volumes are comparable, but when you look at who uses text it’s only about half the phone-owning population. The other half uses text twice as much.

Pre-pay is minimal, far lower than the 70 per cent in Europe. It will be interesting to see what the Chinese do about security, too.

Take a GSM phone to China today and you’ll get a warning that there is no encryption. WCDMA has much better encryption, and you can be sure the Chinese authorities will want to be able to intercept calls. Perhaps they will have to rely on listening through the network operator.

Of course that’s not an option they have in the UK, which might account for some interesting network planning issues around the Chinese Embassy in London. They wouldn’t perhaps be running a phantom cell so they can listen to calls and read the text messages of the Free Tibet protestors outside, would they? ®

Catherine Keynes is a electronic engineer turned consultant who works for IT and telecoms companies. She blogs at Cat Calling.