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Billions at stake as China issues 3G telecom licenses

China issued long-awaited third-generation mobile phone licenses yesterday, a move that will pour billions of dollars into new networks as consumers buy video and Internet-enabled handsets.

The Ministry of Industry and Information Technology issued licenses covering the three major standards in China, Europe and North America, in a move that could fundamentally alter the way telecom operators do business.

“Telecom operators used to provide only access to network and did not care much about content. But now they’ll rush to develop content,” said Tang Mingjun (唐明君), a Shanghai-based analyst with Shenyin and Wanguo Securities (申銀萬國證券).

Market leader China Mobile Ltd (中國移動通信) received a license for the Chinese-developed TD-SCDMA standard, according to Wang Lijian, a spokesman for the Ministry of Industry and Information Technology.

China Unicom Ltd (中國聯通) got a license for Europe’s WCDMA standard, while China Telecom Corp (中國電信) will handle North America’s CDMA 2000, Wang said.

The international standards require that operators pay royalties to foreign developers.

China Mobile began a non-commercial trial of its 3G service in April last year involving 800,000 people, but it has been plagued by complaints that the service is unreliable, said Fang Meiqin, an associate director of Beijing-based BDA China.

China Telecom is expected to launch its 3G service in the first quarter in major cities and China Unicom is aiming to roll out its service in May in Beijing and expand its coverage to about 200 cities by September, Fang said.
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