The third-generation (3G) mobile phone service is ready for use in the upcoming Beijing Olympics as the high-speed wireless connection service and related products were formally delivered on Monday.

China Mobile, China’s top wireless operator, and South Korean cell phone producer Samsung presented 15,000 3G handsets, plus data cards and nearly 3 million yuan (about 428,600 U.S. dollars) of calling fees, to the Beijing Organizing Committee for the 29th Olympic Games here on Monday.

With the offer, work staff and volunteers of the Games can enjoy high-speed data transmissions, which allow them to watch televised games, play videos, and surf the Internet on cell phones.

The service is based on the Chinese 3G standard, known as TD-SCDMA (Time Division Synchronous Code Division Multiple Access).

China Mobile has basically finished construction of the TD-SCDMA network in eight cities, five of which are to host events for the Beijing Olympics in August, including Beijing, Shanghai and Tianjin, said the company.

China has promised to provide 3G service for the Games. China Mobile is the sole cooperative partner for the Beijing Olympics in mobile communications services while Samsung is the only one in mobile terminal supply.

China Mobile started the commercial trials of 3G services in the country in April.

The International Telecommunication Union recognized TD-SCDMA as one of the world’s three official 3G standards in 2000. The other two are Europe’s WCDMA and North America’s CDMA 2000.

Alcatel (Paris: CGEP.PA and NYSE: ALA) and Datang Telecom Technology and Industry Group (Datang Group) today signed a Memorandum of Understanding (MOU) in Beijing that further reinforces Alcatel’s commitment to support China’s home-grown 3G standard, TD-SCDMA. This MOU complements an initial agreement that was concluded between Datang Mobile and Alcatel Shanghai Bell in November 2004.

According to the MOU, Alcatel and Datang Group will work closely together to drive TD-SCDMA development. Specifically, the MOU reinforces the cooperation that currently exists between the two companies in the areas of sales, marketing, industrialization, research and development of TD-SCDMA products and technologies for the domestic China market. Alcatel will assist the Datang Group abroad and support this global effort by taking advantage of its worldwide presence in over 130 countries. Finally, the MOU includes joint development of LTE (Long Term Evolution) products and technologies.

The signature of this MOU is a demonstration of the confidence both companies place in the future of TD-SCDMA and of their intention to become leading providers of TD-SCDMA when 3G arrives in China and well-positioned to capture a number of market opportunities.

In November 2004, Alcatel and Datang Mobile, a subsidiary of Datang Group, signed an agreement to invest in the industrialization of TD-SCDMA in China. In April 2005, Alcatel Shanghai Bell and Datang jointly demonstrated a live end-to-end TD-SCDMA solution during the TD-SCDMA International Summit in Beijing. In August 2005, the two companies finished the TD-SCDMA industrialization and announced readiness for large-scale commercial deployment. In March 2006, Alcatel Shanghai Bell and Datang jointly established a TD-SCDMA lab to provide a real network environment dedicated to interoperability testing between GSM and TD-SCDMA applications.

After years of market uncertainty, with investors wringing their hands and restructuring their finances, 3G has finally gained credibility.

“3G subscriptions, including CDMA2000, are forecast to hit 285 million by the end of 2006,” says ABI Research’s Asia-Pacific director, Jake Saunders. He goes on to say that, “Operators’ overall capital expenditure will grow for the fourth year to reach $126.4 billion, and annual 3G-related handset shipments should pull past 300 million.”

W-CDMA is starting to pull its weight in the 3G stakes, and is expected to overhaul CDMA2000 by about 2012, but CDMA2000 is certainly not out for the count: it has proved to be an efficient solution. Nevertheless, W-CDMA will continue to keep the pressure on, and as end-users replace their GSM handsets, many will default to purchasing a W-CDMA handset, providing manufacturers with increasing economies of scale.

But not even W-CDMA backers can afford to stand still. TD-SCDMA may be taking time to reach commercial reality in China, but it is already clear that Chinese infrastructure vendors, such as Datang Mobile, are re-engineering their solutions to offer a hybrid TD-SCDMA/HSDPA solution that makes the most of both technologies. WiMAX, too, cannot be underestimated.

These access technologies dictate the overall cost of service delivery and the functionality of the value-added services that operators wish to offer. They also determine which camps of vendors (and their upstream and downstream component suppliers) will receive the lion’s share of the equipment-spending pie. Intangible factors such as legacy equipment integration, access to towers, backhaul infrastructure, handset lineups, and vendor financing also enter the equation.

“The exciting prospect is that national markets could be opening up to alternative access technologies more than ever before,” says Saunders. “If the vendors of the new alternative 3G+ solutions can demonstrate that they can operate alongside existing 3G and even 2G infrastructures, the opportunities for new entrants (or even a few industry veterans such as Qualcomm and Lucent) could suddenly look a lot brighter.”

ABI Research’s new study, “3G Mobile Market Trends” surveys the current 2G and 3G cellular landscape, identifies markets with the greatest potential for 3G and 3G+ development, and compares the various 2G, 3G, and 3G+ access technologies. It includes 3G subscriber and handset shipment numbers, and considers the operators and the evolution of their CAPEX. The study forms a part of three ABI Research Services, Mobile Broadband, Mobile Operators and Wireless Infrastructure.