Due to the investigation into some 429 million euros (US$566 million) in suspicious payments, Nokia and Siemens have decided to postpone the establishment of their joint venture.

"That is creating some uncertainties (for the joint venture between Potevio and Nokia)," said Tao.

Nokia has been betting on the joint venture with Potevio to get a share of the TD-SCDMA market in China. Some industry observers expect TD-SCDMA to account for about one-third of China's 3G market.

TD-SCDMA has been lagging behind WCDMA and the US-backed 3G standard, CDMA 2000. But the Chinese standard has gained significant momentum in recent months.

Last week, a TD-SCDMA project by Datang Mobile, the major developer of the standard, passed an evaluation by the Ministry of Information Industry (MII), which said the commercial availability of TD-SCDMA had been verified.

Potevio will undergo a similar evaluation by the MII on Thursday, Tao said. Potevio's TD-SCDMA equipment is manufactured by its subsidiary EastCom, based in Hangzhou, the capital of East China's Zhejiang Province.

Siemens already established a joint venture, TD Tech, with China's Huawei Technologies to develop TD-SCDMA technologies. That could also jeopardize the Nokia-Potevio joint venture as Nokia-Siemens Networks, if established, may have to decide whether to merge the two China-based joint ventures.

Tao said TD-SCDMA is "basically mature," despite some minor problems such as inadequate mobile phones supporting the telephony, as well as inadequate interoperability between different terminals.

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