China limbers up with 3G licences

China is anticipated to issue 3G licences by June to ensure a cutting-edge mobile phone infrastructure for the 2008 Beijing Olympics.

This move would generate $12bn in spending on new equipment, and has been the talk of the 3GSM mobile trade fair in Barcelona this week.

Although China has the pressing deadline of the Olympics, which will mark its high-profile launch onto the world stage, it is keen to push its home grown 3G mobile communications intellectual property.

The TD-SCDMA standard is still being tested which is why China is being slow to distribute its 3G licences.

The Chinese government has to decide whether to push ahead with the commercially unproven TD-SCDMA, or opt for the European WCDMA standard. There is also the US CDMA 2000standard.

Some industry watchers believe that China will hedge its bets and build networks based on both WCDMA and CDMA 2000, with TD-SCDMA used more for support rather than as a standalone system.

However European manufacturing heavyweight Siemens is backing the Chinese technology, and its developers claim it will use only a fifth of the bandwidth of WCDMA.

And a mark against CDMA 2000 is that its developer, Qualcomm, levies a hefty charge for its use.

China is the largest mobile phone market in the world. In 2004, the Chinese purchased 92 million mobile phones, an increase of 15.8 per cent on 2003.

Analyst firm IDC forecasts sales of more than 400 million handsets between now and 2009.