China may issue fewer licenses for high-speed mobile-phone services than planned and the permits may cover regions instead of the entire nation, according to a government official.
"The number of the licenses will be fewer than we previously estimated," Chen Jinqiao (陳進星), a director of telecommunication policy at the Ministry of Information Industry, said yesterday in an interview in Beijing.
Also, "we don't rule out the possibility of issuing regional service licenses," he said.
Chen didn't say how many third-generation (3G) licenses will be issued or provide a timetable for the introduction of the service.
China may grant three 3G licenses early this year, Hong Kong's Oriental Daily reported Nov. 22, without elaborating.
Ericsson AB, Motorola Inc and other telecommunications equipment vendors are awaiting China's introduction of 3G services, expected to spur billions of dollars of spending by operators such as China Mobile (Hong Kong) (中國移動).
Competition in the world's biggest phone market by users became so fierce that the government last year told mobile operators to stop cutting prices. China has six telecommunication operators comprising China Mobile, China Unicom Ltd (中國聯通), China Telecom Corp (中國電信) and China Network Communications Group Corp (中國網通).
"It makes sense not to issue too many 3G licenses as it may lead to intense competition, as we have already seen in the 2.5G market where operators undercut prices to gain market share," said Tina Wang, a Beijing-based analyst at Norson Telecom Consulting, which researches China's telecommunications market.
The Ministry of Information Industry will submit a final proposal on the introduction of 3G services sometime this year to the State Council, the country's highest governing body, Chen said.
China had 334.8 million cellphone subscribers at the end of December, according to government statistics. The nation may add 58 million this year, state-run Xinhua News agency said on Jan. 12, citing an unidentified Ministry of Information Industry official.
The ministry asked operators to prepare for commercial testing of 3G service, the Beijing Times reported Jan. 18, citing an unidentified expert at a research institute affiliated with the ministry.
Testing may take place from this month through June, the report said.
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