China's telecom sector gets 3G licenses

(Xinhua)
Updated: 2009-01-07 21:00

BEIJING - China's telecommunications supervisor on Wednesday issued long-awaited third-generation (3G) mobile phone licenses to three mobile operators, a move that is expected to lead to billions of dollars being invested in building new networks.

The Ministry of Industry and Information Technology (MIIT) said China's biggest mobile operator, China Mobile, was awarded a license for TD-SCDMA, the domestically-developed 3G standard.

The other two main carriers, China Telecom and China Unicom, received licenses for the US-developed CDMA2000 and Europe's WCDMA, respectively.

The 3G high-speed networks can handle faster data downloads, allowing handset users to make video calls and watch TV programs.

The MIIT also issued 23 regulations on the requirements of 3G network operation, covering such aspects as market competition, consumer rights, user information security, telecommunication charges management and facility building.

The news would also benefit the 3G network equipment and cell phone manufacturers, including ZTE Corp., Wuhan Fingu Electronic Technology Co. and Ningbo Bird Co. Ltd.

The 3G cell phone sales would top 300 billion yuan (US$44 billion) during the 2009-2011 period, Sinolink Securities analyst Chen Yunhong forecast.

Shares of these companies declined, however, because of profit taking. ZTE Corp. shares fell 4.03 percent to 27.83 yuan. Wuhan Fingu Electronic Technology Co. was down 2.73 percent to 17.45 yuan. Ningbo Bird Co. Ltd. shed 1.92 percent to 2.55 yuan.

The licenses were issued a day after China Unicom announced it had won government approval to merge with China Network Communications Group Corp. The new China Unicom will hold all the assets and business of the two former companies.

The merger marks the final move in the restructuring of the country's telecommunication industry, which saw six telecom operators rationalize into three: China Mobile, China Telecom and China Unicom.

The State Council, the country's Cabinet, approved the issue of the 3G licenses on December 31. MIIT pledged to issue licenses when the industry restructuring was accomplished.

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