China issues 3G licences

China issued long-awaited 3G mobile phone licenses Wednesday, a move that will pour billions of dollars into new networks as consumers buy video- and Internet-enabled handsets.

The Ministry of Industry & Information Technology issued licenses covering the three major standards in China, Europe and North America, ministry spokesman Wang Lijian told AFP.

Market leader China Mobile received a license for the Chinese-developed TD-SCDMA standard, he said.

China Unicom got a license for Europes WCDMA standard while China Telecom will handle North Americas CDMA 2000, Wang said. The two international standards require that operators pay royalties to foreign developers.

Third-generation, or 3G, networks enable faster data transmission and advanced services such as wide-area wireless calls, web surfing & video.

The licenses are of huge importance as China is the worlds biggest mobile phone market, with more than 634 million subscribers by the end of November.

Analysts said that although it may be years before 3G services become popular in China, issuing the licenses will immediately benefit global equipment makers such as Siemens, Ericsson and Nokia, as well as local rivals.

"Domestic makers like Huawei Technologies and ZTE have been making noticeable progress both abroad & at home. They’re grabbing market shares and posing a challenge to foreign companies," Fang said.

Industry & Information Technology Minister Li Yizhong said last month the carriers were expected to invest about 41 billion dollars in 3G networks over the next 2 years, with at least 29 billion dollars to be spent in 2009.

Govt. has said the spending that will accompany the launch of 3G services is an important part of efforts to battle the slowdown caused by the global economic turmoil.

The companies were not expected to have to pay for the licenses themselves, analysts said, reflecting the governments desire to support the enterprises, which are all state-controlled.

Beijing has been preparing for the roll-out of 3G since the beginning of the decade.

The global 3G industry association, 3rd Generation Partnership Project, first approved Chinas TD-SCDMA in 2001 as one of the worlds 3G standards, but there have been countless delays since.

Analysts have said the delays were partly because China needed more time to perfect its home-grown standard.

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