China's mobile phone handset industry has received a boost as the regulator has granted manufacturing licences to five new enterprises.

The National Development and Reform Commission (NDRC) announced on Thursday that five firms have won approval to produce wireless phones.

This is the first batch of firms which have won approval since the regulator began to implement its new licencing policy this year.

The firms are Shenzhen-based Huawei Technologies, Ningbo-based Aux and Nanjing-based GaoTong Technology Industry.

Qingdao-based Hisense and Dalian-based Daxian Pantech Telecom, which previously had licences for the CDMA type of handsets, were granted licences for GSM phones.

According to the NDRC, the five companies will be able to produce about 11 million handsets annually.

"Confronted with intense market competition, handset manufacturers should enhance their research and development, upgrade their technology and the quality of their products," according to the NDRC.

It also warned potential applicants to look again at investment risks and market conditions before joining the market.

"We will take advantage of the licence to introduce our handsets into the domestic market as soon as possible," said Fu Jun, spokesman of Huawei Technologies.

He said the company is to introduce its CDMA phones soon.

"It is great news for Aux," said Li Xiaolong, market director of Aux Telecommunications.

"We are ready to join the market and our handsets are likely to be introduced next week," he said.

"The lifting of restrictions on handset manufacturing licences is a must as the market is becoming more and more open," said Zeng Jianqiu, a professor at Beijing University of Post and Telecommunications.

More participants entering the sector will also help stir up the industry, he said.

Figures show that before the new licences were issued there were already 37 handset manufacturers in the Chinese market.

This move will give mobile subscribers more choice, and lower-priced handsets and better services, Zeng said.

(China Daily 04/02/2005 page5)