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3G will benefit Chinese cellular firms

October 8, 2003

Chinese cellular operators China Mobile and China Unicom will benefit greatly from the introduction of 3G wireless services according to industry experts. The two firms are the only mobile operators in China but the number will increase by two as four 3G licenses would be handed out when the auction for licenses begin.

"3G will help them to sign up more subscribers and churn out more profits for them," said Song Junde, professor with Beijing University of Post and Telecommunications.

He believes the increase in wireless data will improve the ARPU of mobile operators and help increase the number of high-end subscribers.

He said the success of 3G would depend on a stable telecom system, the variety of new 3G wireless services, reasonable prices, sound business model, as well as the support of the government.

Top telecom equipment makers from around the world has called on the government to issue 3G licenses as soon as possible, believing the time is right for 3G deployment in China.

Not everyone is keen to move to 3G so quickly. China Unicom and China Mobile are eager to hold onto their presence in the mobile phone market. After the sluggish start of 3G in other countries, both operators are taking a cautious approach to 3G.

The general manager of the technical department of China Unicom, Zhang Zhijiang, said the company would gradually migrate 2G/2.5G services to 3G services.

Government officials have also concluded that the Chinese market is not ready for 3G.

Weng Ku, Ministry of Information Industry, said, "It is not exciting enough for China to roll it out now."

 


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