Years of industry speculation concerning the scheduling of China’s 3G licensing process seem set to come to an end after the China Daily website published an article claiming that the Ministry of Industry and Information Technology (MIIT) will issue licences by the end of December.
The MIIT has yet to say whether licences will be technology-specific or neutral, which operators will be awarded licences, how much they will be required to pay for the permits, and what targets and goals will be set for service deployment.
However, it’s safe to say that the answers - when they come - will not surprise the analyst community at large. Indeed, for a state obsessed with keeping ‘national interest’ information suppressed, much is already known of the broad aspects of the government’s plans for 3G.
GSM operator China Mobile will be tasked with developing a network based on the locally-developed 3G standard, TD-SCDMA, a difficult task given that few vendors have so far produced equipment using this standard. It will also struggle to make its TD-SCDMA network work with other networks in China and overseas.
Rival GSM operator China Unicom will have an easier time of it, augmenting its network with WCDMA technology. Fixed operator China Telecom, however, will be expanding its network with EV-DO technology, a costly exercise that will likely impact on its profitability for several years.
The Chinese operators are expected to spend more than $29 billion on building their 3G networks; this money would likely be reinvested back into the country as key vendors such as Huawei Technologies, ZTE, China Wireless Technologies and China Techfaith are already key suppliers to the operators and already work closely with them on other matters. Indeed, Huawei has come from nowhere to dominate the CDMA handsets market in little more than a year, and may well squeeze the market share enjoyed by Samsung Telecommunications. Similarly, Nokia and Motorola are under pressure to perform in China as local rivals renew their assault on the market with cheap handsets.
Nokia is in the fortunate position of having developed a series of TD-SCDMA handsets that China Mobile could sell to its customers. The Finnish company is also confident of doing well out of the launch of 3G in China, where local suppliers expect to see sales of at least 4.5 million TD-SCDMA handsets in the first year. Trial TD-SCDMA networks have already been launched in various locations, so there is a ready-made market.
Indeed, the Chinese market is huge and is continuing to grow, despite a broader economic slowdown caused by the encroaching global recession. In a recently-published report on the BRIC economies, Juniper Research expects that there will be 608 million subscribers in China by the end of 2008, a figure that will grow to 777.9 million by 2013.
Tags: 3G, 3G Licensing, CDMA, China, China Mobile, China Techfaith Wireless, China Telecom, China Unicom, China United Communications, China Wireless Technologies, EV-DO, GSM, handsets, Huawei Technologies, LTE, MIIT, Ministry of Industry and Information Technology, mobile, Mobile BRIC Report, mobile handsets, Motorola, Nokia, regulation, Samsung, TD-SCDMA, ZTE
Interesting web posted. I went to China last year, it was awesome. China has also been through rapid increase in technology wise and manufacturing. Its amazing to see China comes so far!
I have enjoyed reading.Nice blog and very informative.
I thought you would be interested in the interview I recently conducted of Jon Li and David Williams of Shanghai based Asentio Design.
Award winning mobile phone designers, their comments on the recent developments add some important context to the overall conversation, and I thought you/ your readers would find the clip of interest.
The clip name is 3G in China and is 9:30 in length - http://www.youtube.com/watch?v=kw_Eg4JQJtY
If you have any questions for me or for Jon/ David, please let me know.
Hope all is well and all the best for 2009.
Rich