China Issues 3-G Licenses to Three Domestic Firms
BEIJING -- China issued third-generation mobile licenses to the country's three telecommunications operators, China Mobile Ltd., China Unicom (Hong Kong) Ltd. and China Telecom Corp., the Ministry of Industry and Information Technology said.The ministry issued a license to China Mobile to offer services based on Time Division-Synchronous Code Division Multiple Access, a homegrown third-generation technology, said spokesman Wang Lijian.
Mr. Wang said the ministry has issued China Unicom a license to offer services based on the Wideband Code Division Multiple Access technology widely used in Europe and Japan, and China Telecom a license to offer services based on the CDMA2000 technology used in the U.S. and South Korea.
China Mobile said it will expand its network coverage and increase the variety of mobile services. State radio reported the company plans to expand its network to cover all of China's cities by 2011, citing Chief Executive Wang Jianzhou.
The report also cited China Telecom Vice General Manager Zhang Jiping as saying the company aims to "have the capacity" to offer 3G services in all Chinese cities within the next three months, and expand the services to all counties within six months.
China Unicom Vice President Li Gang said in the report the company hopes to launch 3G services "as soon as possible," but didn't give a timetable.
Analysts said the issuance of 3G licenses would allow the local carriers to offer services such as Web browsing and video conferencing, which could push up average revenue per user in the long term. But they said the huge initial network investments required will likely lead to large depreciation charges, which could pressure profit in the year or two ahead.
Minister of Industry and Information Technology Li Yizhong said in December the carriers would invest 280 billion yuan ($41 billion) in developing third-generation networks over the next two years. In late May, the Chinese government unveiled a telecom sector restructuring that merged the country's six telecom operators into three full-service providers.
The 3G licenses will likely be a boon for telecom equipment vendors as the operators' hefty spending on network equipment should help boost orders and sales.