3G phone licenses OK'd at last

By Zhu Shenshen | January 1, 2009, Thursday |

Print Edition

CHINA'S State Council yesterday approved the issuance of the long-awaited licenses for third-generation mobile phone services.

The move by the nation's Cabinet sets off what's sure to be intense competition among foreign and Chinese equipment makers for up to US$41 billion in orders. Analysts said it is the most significant advance in the country's telecom industry since mobile services debuted in 1990.

The license issuance will generate investment in network construction, handset development and new services. It is expected to stimulate the Chinese economy and lift the country's gross domestic product by 0.1 to 0.2 percentage points annually over the next several years, analysts said.

The government approved 3G services based on three technologies as expected: CDMA 2000 (code division multiple access) and WCDMA (wideband CDMA), which are widely used globally; and the domestically developed standard, TD-SCDMA (time division-synchronized CDMA).

The Ministry of Industry and Information Technology will issue the licenses to carriers such as China Mobile, China Unicom and China Telecom.

The State Council didn't say when 3G services would be available to the public, but it's widely expected to happen by the end of January.

"Globally speaking, it's a little late for China to start 3G services, as the country was waiting for its homegrown TD-SCDMA to mature. The financial crisis, however, is the catalyst for the issuance," Sandy Shen, an analyst at Gartner Inc, a US-based consulting firm, said yesterday.

In a statement, the Cabinet said the move reflected the fact that the nation's major telecommunication firms have basically completed their restructuring programs.

Chinese carriers are expected to spend 280 billion yuan (US$41.2 billion) on 3G through the next two years. Investment in 3G and other telecommunications services will reach 320 billion annually in a few years.

According to earlier reports, the largest Chinese carrier, China Mobile, expects to sign up 100 million 3G subscribers - more than most nations' entire mobile markets - in the next three years.

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3G phone licenses OK'd at last

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