Jane Chen / Shanghai Daily news

China Mobile Communication Corp, China's leading mobile telecom operator, may invest 3 billion yuan (US$385 million) into Datang Telecom Technology and Industry Group to fund the development of the China-developed Time Division - Synchronous Code Division Multiple Access (TD-SCDMA), today's China Business News reported, citing a close source to the deal.

However, China Mobile's vice president Lu Xiangdong denied the report.

Datang's vice general manager and chief scientist Li Shihe also denied the report by saying that he is not aware of the fund injection plan and will not comment.

The fund input speculation, which has been circulating on the market all week, has strongly pushed up the shares of Datang Telecom Technology Co Ltd, Datang Group's A-share listing arm. The shares jumped 20 percent in total for a consecutive three days since Tuesday.

In response, Datang Mobile issued a statement yesterday that it has  no major corporate trade undisclosed.

Fund injection is regarded industry wide as an effective way to help out distressed companies like Datang, the finance-plagued developer of TD-SCDMA standard. In this case, it will boost the China-patented 3G technology for commercial use.

Lu Qijun, an official with the research center of State-owned Assets Supervision and Administration Commission (SASAC), indicated that the state assets authority is in favor of the China-patented 3G standard.

With this telecom developer/manufacturer’s cooperation, the development and commercial use of TD-SCDMA will be boosted, he believes.

Datang led the unveiling of a full range of TD-SCDMA-based products and solutions yesterday in Beijing.

Following the success in the first round of commercial tests of the 3G networks, China is speeding up the second-round, to stick to its commitment of completing the 3G networks by 2008 to serve the Beijing Olympic Games.

China Mobile will be the telecom operator managing the TD-SCDMA network construction for the second round test, which is planned to kick off in March.

The new-round test will expand to 10 cities, including Beijing, Shanghai, Qingdao, Xiamen, Qinghuangdao, Shenyang, Hong Kong, Baoding, Guangzhou and Shenzhen. The first seven cities will be venues for the 2008 Beijing Olympics.

The test is expected to be complete in October, and phone subscriptions will then start for the networks.