3G licensing keeps industry guessing
By Zi Mu (China Daily)Updated: 2006-12-04 08:48
China Mobile has been open in its preference for WCDMA as it can upgrade its
existing network, based on GSM, a 2G technology, rather than build from scratch.
GSM and WCDMA share the same core networks, which could help China Mobile save
some costs if it chooses to upgrade its GSM networks to WCDMA
networks.
Some analysts expect the US Government might seek to apply
pressure on Chinese regulators on 3G licensing, which could mean the licensing
process could be further delayed.
Yet, a big factor affecting the licensing
scheme might be the government's intention to restructure the domestic telecom
industry.
Status quo
Currently, only China Mobile and China Unicom
are offering mobile phone services. China Telecom and China Netcom , struggling with their slowing fixed-line
telephone business, are hankering for 3G licences to provide the cellular
services.
Many industry analysts expect the government to restructure the
industry by merging the top four State-owned operators to three, as part of its
efforts to spur effective competition.
China Unicom, which runs cellular
networks based on two different technologies, CDMA and GSM, is expected to sell
one of the two networks to China Telecom and China Netcom.
Statistics by
MII showed that China had 449 million mobile phone subscribers by October.
China Mobile dominates the market. Hong
Kong -listed China Mobile Limited had 291 million users by
October.
An industry restructuring could create some bigger players which
could more effectively compete with China Mobile, analysts said. And 3G
licensing could offer a good chance to reshuffle the industry.
The
State-owned Assets Supervision and Administration Commission (SASAC) has
repeatedly denied it could seek to split China Unicom, but said it is "working
on realigning the industry."
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