3G is nearly here, honest
China said last week it will issue third generation licenses by early next year. This will spark a $44 billion spending boom as operators in the world’s largest mobile market tool up with new technology.
China has been saying it would introduce 3G since the beginning of the decade but faced huge obstacles.
Chief among these was its lopsided telecoms industry, dominated by China Mobile, in which Vodafone has a small stake.
Restructuring has since carved the market up into three players.
The 3G licenses will further redress the balance: licences will be apportioned to give its competitors a technological advantage. Thus China Mobile, which has 450 million subscribers, will be stuck with China’s homegrown TD-SCDMA technology. Its smaller peers will, meanwhile, adopt proved international standards.
All three players will ratchet up spending.
Beijing-based consultancy BDA calculates that $16 billion has been earmarked for TD-SCDMA with a further $28 billion for the rest.
In the past, this would have been a boon for international suppliers such as Sweden’s Ericsson, which took the lion’s share of most 2G contracts. Now it is likely to get only 10-20% of the WCDMA business owing to the rise of local suppliers. The likes of Huawei and ZTE are already snaffling supply contracts.
China Mobile will suffer from the increased competition. But note that 3G is by no means a must-have for the average Chinese user. It has been a long wait and, for many, not especially worth it.
Source: Financial Times