China considering only three 3G licenses

April 28, 2004

There could be another twist in the story of 3G cellular licenses in China as the latest news suggest that only three licenses would be awarded instead of 4. The industry wide belief was China would be issuing 4 licenses, 2 going to the fixed line operators and the other 2 to existing mobile operators.

Director of the Institute of Telecommunication Policy Chen Jinqiao believes only one fixed line operator should get a licence in addition to the two existing mobile companies. The Institute of Telecommunication Policy makes recommendations to the Ministry of Information Industry (MII) but has no authority to set policies.

Chen thinks either fixed line operator, China Telecom or China Netcom should get the third licence and be required to build a network based on the Chinese developed TD-SCDMA standard. The two mobile operators would develop their networks based on WCDMA and CDMA2000.

He feels that China doesn't need to replicate one of the three standards by issuing a fourth license.

Chen said licenses are likely to be issued in the second half of next year and services would start 8 to 12 months after the licenses are awarded.

MII Vice Minister Lou Qinjian reiterated yesterday at the Seventh China 3GSM Conference that it will remain cautious about issuing licences. The ministry will "keep an eye on the maturity of 3G technologies and market".

"Meanwhile, we have to protect the interests of mobile subscribers while kicking off new policies, such as the licence issue," Lou said.