China's government has finally issued the 3G network licenses after years of waiting. The announcement is excepted to trigger hot competition for among the network equipment companies. Chinese carriers are expected to spend 280 billion yuan on base stations, switching gear, transmission networks and other infrastructure.
The government will issue licenses for three different 3G standards: WCDMA, CDMA200 and a homegrown Chinese standard, TD-SCDMA. They all fulfill the ITU requirements for 3G standards. By developing its own standard, Chinese telecommunications companies will be able to reduce high royalty and patent payments for the use of foreign technologies. The announcement did not say which companies would receive licenses. But earlier it has been reported that China Mobile Ltd., the dominant carrier, would be assigned the TD-SCDMA standard. The WCDMA will go to China Unicom Ltd. and the TD-SCDMA to China Telecom Ltd.
Beijing repeatedly postponed issuing licenses while it tried to develop its own standard to compete with the global systems. At the same time the operators have been setting up large test networks for at least three years.
The issuance of licenses means some of the world’s biggest telecommunications companies could profit from huge spending on network and mobile phone upgrades, including phone towers and switches. China now has more than 600 million mobile subscribers, and there is fierce competition among international companies to capture market share.
By some estimates, China could have 150 million 3G cellphone subscribers by 2010.
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