China, the world's biggest mobile phone market, is keeping the telecoms industry guessing about when it will pick a technology for third-generation service amid questions about cost and effectiveness.
Put off partly by controversy in Europe over 3G, regulators are wary of letting China's phone companies invest in technology that they worry could soon be obsolete.
The delay is a disappointment for suppliers who thought Beijing was poised to create huge opportunities to replace and upgrade equipment for 250 million Chinese customers.
"Originally I thought that a decision would be made before the end of this year," said Irwin Jacobs, chief executive of US supplier Qualcomm, Inc. "It's clear that will now go into next year."
Regulators are weighing whether to let its four major operators pick their own technology or to make that choice for them, Jacobs said during a recent visit to Beijing.
Third-generation networks are expected to offer faster delivery of data and pictures. But operators across Europe have slowed the launch of 3G amid questions about demand for the services and delays in the arrival of phones.
China is testing competing systems known by such arcane names as CDMA2000 and Wideband CDMA. Complicating matters further, Beijing is trying to develop its own standard -- known as TD-SCDMA -- so that it won't have to pay for foreign technology.
Suppliers say despite tests showing that 3G can be integrated into China's existing network, regulators aren't sure devices based on that standard are ready or worth the money.
Regulators are uneasy about controversy in Europe and elsewhere over auctions of 3G licenses, with some operators complaining about their cost or conditions.
"The auction process [in Europe] should have promoted 3G, but it complicated some factors and actually stopped the growth of 3G," said Wen Ku, an official of China's telecommunications regulator, the Ministry of Information Industry.
"Due to the overall economic slowdown, 3G development has also been adversely affected," he said.
Suppliers insist their technology is ready to go. And they say the numbers of subscribers abroad signing up for 3G services show that the investment is justified.
Jacobs of Qualcomm said he expected China to release a report on 3G radio frequencies in September next year. But he said regulators might announce a choice before then.
China's timing could be influenced by the introduction of 3G in Japan and Europe, said the chief executive of another supplier, Frank Dunn of Nortel Networks.
"In China," Dunn said, "they will be closely monitoring the developments in Asia as well as western Europe."
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