China issues 3G mobile phone licenses

[January 07, 2009]  BEIJING (AP) -- China assigned third-generation mobile phone licenses Wednesday to three carriers in a long-awaited step that is expected to prompt $41 billion in spending on new equipment.

Licenses were granted to China Mobile Ltd., China Unicom Ltd. and China Telecom Corp., the Ministry of Indutry and Information Technology said. Third-generation, or 3G, technology supports Web surfing, wireless video and other services and the start of service is expected to spur new revenue growth.

China has 650 million mobile phone accounts, according to industry minister Li Zhiyong.

Companies have not said when commercial service will begin.

The awarding of licenses was delayed while China's government developed its own technology to compete with two global 3G standards.

The Chinese-developed standard, TD-SCDMA, was assigned to China Mobile, the world's biggest phone carrier by subscribers, the ministry said. That appeared to be an effort to make sure the new system has the financial and technical backing to succeed.

The two global standards, WCDMA and CDMA-2000, were assigned to China Unicom and China Telecom, respectively, the ministry said.

Chinese carriers are expected to spend 280 billion yuan ($41 billion) on new equipment, Li said in December.

Such sales will be important to global suppliers Motorola Inc., Alcatel-Lucent SA, Nokia-Siemens Networks and Ericsson AB as demand elsewhere slumps. But they face competition from fledgling Chinese producers.

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On the Net:

Ministry of Industry and Information Technology (in Chinese): http://www.miit.gov.cn/

China Mobile Ltd.: http://www.chinamobileltd.com/

China Unicom Ltd.:
http://www.chinaunicom.com.hk/

[Associated Press]

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