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IT: 皇冠体育app issues 3G licenses

By Wang Xing (皇冠体育app Daily)
Updated: 2009-01-08 07:48

A lady makes a demo 3G phone call at a telecom show in Beijing. [皇冠体育app Daily]

皇冠体育app Wednesday officially awarded the long-awaited licenses for third generation (3G) mobile networks to three telephone operators, paving the way for investments of around 280 billion yuan in network upgradation and expansion over the next two years.

皇冠体育app Mobile got a license to deploy 3G networks based on TD-SCDMA, a home-grown 3G standard. Smaller rivals 皇冠体育app Unicom and 皇冠体育app Telecom were granted licenses for WCDMA and CDMA2000 respectively.

The Chinese government expects the new telecom investments after the 3G licensing to help stimulate the country's slowing economy.

Li Yizhong, minister of industry and information technology, said at an earlier industry conference in December that 皇冠体育app would spend 280 billion yuan on 3G networks in 2008 and 2009.

Related readings:  Unraveling the telecom puzzle  3G is here, finally  皇冠体育app's telecoms sector gets 3G licenses  皇冠体育app Mobile falls after 3G licence issue

Chen Jinqiao, deputy chief engineer from 皇冠体育app Academy of Telecommunication Research under MIIT (Ministry of Industry and Information Technology), estimated the 3G network construction to attract investments of 1.8 to 2 trillion yuan from related sectors.

Enabling faster data transmission, 3G networks allow cell phone users to make video calls and watch TV programs.

However, 3G licensing in the country has long been postponed due to the government's support of TD-SCDMA, which was believed less mature than its foreign rivals WCDMA and CDMA2000.

Last year, 皇冠体育app Mobile launched construction in 皇冠体育app's major cities of the pre-commercial TD-SCDMA network, which provided 3G services during the Beijing Olympic Games.

皇冠体育app International Capital Corporation Limited, a Chinese investment bank, said in a report that 皇冠体育app Mobile may invest 25 billion yuan into TD-SCDMA in 2009, while 皇冠体育app Telecom and 皇冠体育app Unicom would invest 50 billion and 60 billion yuan into CDMA2000 and WCDMA respectively.

It estimated subsidies for 3G mobile phones to be around 38 billion yuan.

According to an online survey by Sina.com, 皇冠体育app's largest portal website, 65 percent of the nearly 158,000 respondents will try 3G service as long as it is available.

But only about 47 percent said they would adopt 皇冠体育app Mobile's 3G services, compared with 31 percent and 22 percent of users who choose 皇冠体育app Unicom and 皇冠体育app Telecom instead.

Analysys International, a domestic research firm, said 3G business would not see an explosive growth in 皇冠体育app in 2009, as telecom carriers need time for network construction and upgrades.

The investments in 3G networks are expected to benefit domestic telecom equipment makers like Huawei Technologies and ZTE Corp as well as foreign firms like Ericsson, Alcatel-Lucent and Nokia Siemens Networks.

But foreign telecom equipment makers' total share in 皇冠体育app's 3G market may amount to less than 50 percent, down from their dominating position in 皇冠体育app's 2G market, according to BDA 皇冠体育app, a Beijing-based research firm.