China today confirmed the official allocation of 3G licenses to the country’s three state-owned mobile operators. AP News reports that, as expected, market-leader China Mobile – the world’s largest mobile operator – has been granted a license to deploy commercial nationwide services based on China’s homegrown 3G technology, TD-SCDMA, whilst China Unicom and China Telecom will launch 3G services based on global standards WCDMA and CDMA2000 1xEV-DO, respectively. The move ends years of speculation over the country’s 3G fate and is expected to trigger investment levels of about US$41 billion over the next two years. No timeline for service launch has been announced. The license awards will be welcomed by domestic network infrastructure vendors such as Huawei and ZTE, as well as western suppliers such as Ericsson, Alcatel-Lucent and Nokia Siemens Networks.
“The need to stimulate the economy is the main driver” for issuing licenses now, said Francis Cheung, head of Asian telecommunications research at CLSA Ltd in Hong Kong, according to a Bloomberg report. The world’s largest mobile market, China trails most of the world in 3G. 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. Despite such concerns, a Telegraph report today cites Chen Jianqiao from China’s Ministry of Industry and Information Technology as stating that the country expects 500 million people to sign-up for 3G services in the next five years. China currently has over 600 million mobile users. The Telegraph report claims this estimate could make the Chinese 3G market five times the size of Europe’s.