Thursday, April 12, 2007

China - 3G

The fog over China's 3G begins to clear
full report in CBF
From China Business Feature

BEIJING, April 12 /Xinhua-PRNewswire/ -- CEOCIO Magazine, through its China Business Feature, recently reported on the latest developments on China's 3G industry. The writer commented that the uncertainties surrounding China's telecommunications future was finally starting to clear.

China Business Feature reported that, "China Mobile's first round of bidding for TD-SCDMA network construction started in March, and the procurement of network equipment is expected to be done by the end of May. With 15,000 base stations deployed, the TD-SCDMA network covers ten cities and 95% of the existing networks. It will be completed and launched by the end of October. RMB26.7 billion (US$3.4 billion) has been put aside for TD-SCDMA construction.

"The 3G licenses have yet to be issued and the scheme for telecom reorganization is still nebulous. Due to risks in the first commercial deployment of the TD-SCDMA network, China's 3G is still a little gun-shy.

"In any case, TD-SCDMA is coming to China, and it's getting lots of governmental support for the start-up. TD-SCDMA is of great political and economic significance as the mobile communication standard was initiated by China itself. There is no turning back on this venture as China's telecom industry makes its first formal steps into the 3G era.

"Meanwhile, doubts about 3G licenses and telecom reorganization are being clarified. The most likely scheme for telecom reorganization goes something like this: China Unicom sells the CDMA network to China Telecom, and merges its GSM network business with China Netcom. If so, in the 3G era, a new landscape will develop where two new companies will compete against China Mobile. The government authorities have always stated that to avoid repeated investments, three 3G licenses will be rational. Now, the most likely outcome is that China Mobile will be granted a TD-SCDMA license, China Telecom will be given a CDMA2000 license, and China Unicom and China Netcom will share one WCDMA license.

"With the disclosure of China Mobile's procurement list of TD-SCDMA equipment, telecom equipment vendors are even more eager than the operators to start the bidding war. Although RMB20 billion (US$2.5 billion) is not a stunning figure for manufacturers with high expectations for 3G, everyone is clear that the results of the bidding will have a great impact on the further application of 3G."

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