AP News reports that China last week approved long-awaited licenses for 3G mobile networks, a move expected to trigger investment levels of about US$41 billion over the next two years. The country’s State Council, its highest government body, gave the Ministry of Industry and Information Technology (MIIT) the go-ahead to distribute 3G licenses, which are expected to be awarded in the next few weeks. Although the announcement did not specify which companies would receive licenses, it is widely expected that market-leader China Mobile will be assigned the Chinese-developed TD-SCDMA standard, whilst global 3G standards WCDMA and CDMA2000 1xEV-DO will go to China Unicom and China Telecom, respectively. Last week it was reported that China Mobile has agreed to lease the TD-SCDMA network being built by its parent, China Mobile Communications (CMCC), and will pay a maximum of CNY1 billion (US$146 million) during 2009.
On Friday, Reuters noted that the move by the State Council gave all three companies a share price boost, with China Mobile’s stock rising more than 3 percent, China Unicom increasing by 5.2 percent and China Telecom rising by almost 6 percent. The world’s largest mobile market, China trails the world in terms of rollout of 3G services. In May last year China’s government announced plans to meld its six main state-owned companies into three operators in an effort to reduce China Mobile’s dominance and enhance service offerings. However, recent forecasts from Wireless Intelligence have cast doubt over the potential success of this restructuring with regard to reducing China Mobile’s dominance in the market.
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