mocoNews.net - China To Issue 3G Licenses, Or Not

Is China gearing up to finally issue its long-awaited 3G licenses? Chinese Industry and Information Technology vice minister Xi Guohua said at the China Mobility International Summit today that the "time is now ripe" for the country to issue 3G licenses, reports China Daily. Xi added that the Chinese government was "currently studying" 3G policy and implementation, and would announce their findings "soon."

But "soon" is a relative term, especially in China where 3G licenses have been delayed for years now. In May, the government announced a huge restructuring of the telecoms industry and said it would not issue the licenses until it was complete. This was to promote healthy competition in the world's largest wireless markets, which has 600 million mobile users, the vast majority (70 percent) of whom are customers of China Mobile. But according to an FT.com feature, there's still a lot standing in the way in streamlining the sector, which might not be resolved for another year or two.

Much of it is down to China's homegrown 3G standard TD-SCDMA. It has always been assumed that delaying the licenses gives TD growing space, and hopefully, the ability to compete against 3G techonologies already used worldwide, including W-CDMA. The government has insisted that China Mobile implement TD, though there have been numerous reports that execs inside the telecoms firm don't believe in the technology themselves. There have also been reports that customers have found TD services less that satisfactory.

But as Edmund Yu, CEO of research firm Analysys, points out to the FT no one can back down from support of TD without "losing face", now that "it has been pushed for so long" by the government. Apparently, the only "palatable" way out is if China Mobile loses customers (presumably voting with their feet against TD) to its smaller rivals, allowing it to shelve the standard, for say, use in mobile broadband for notebooks?as Yu believes could eventually happen. But China Mobile is going strong capturing 83 percent of all new subscriptions, and its smaller rivals China Unicom and China Telecom haven't been able to catch up with it. So, China Mobile trundles on with trying to implement TD, while the licenses remain on hold.

But, then, Xi also said at the summit that introducing 3G could be viewed as the government's attempt to boost the economy, noting that "upgrading telecom infrastructure construction can have a stimulative impact on the economy," so perhaps "soon," really will mean soon. But Xi also reiterated that the platform "must be given strong support," so the guessing game continues.