China expected to auction 3G licenses; more 3G standards
loom
individual.com
July 12, 2000
By BridgeNews
Shanghai--July 11--China may decide to auction licenses to operate third generation (3G) mobile communication networks, sources told BridgeNews Tuesday. The country may also adopt one or more 3G standards to minimize the risk of over-reliance on America's CDMA (code division mobile access)-supported wide-band CDMA 2000, especially since most of China's mobile users are GSM (global system for mobile communication) subscribers, analysts added.
Currently, there are three main 3G technological standards: the CDMA (code division mobile access)-supported wide-band CDMA 2000, the GSM (global system of mobile communications)-generated WCDMA, and China's TC-SCDMA standard.
AUCTION SYSTEM POSSIBLE FOR 3G LICENSES
The Ministry of Information Industry (MII) is researching methods of awarding third generation (3G) mobile communication licenses and is expected to announce detailed plans this year, a source with MII told BridgeNews.
"We are doing some research work on the 3G licenses, and plan to decide the detailed method this year. The most important thing is the form of the license and how to award it," the source said.
According to a source with International Data Corporation (IDC), however, an auction-based system appears to be the preferred route for the government, and rumors of an auction system have been circulating in China for weeks.
Shi Jixing, the chief executive officer of Shanghai-listed Eastern Communications, said in an interview on the wireless industry, carried on wireless.wow.f, a Finish web site, that China has to develop healthy competition to face new challenges posed by its entry into the World Trade Organization.
Eastern Communication, a state-owned enterprise under the auspices of the powerful MII, is one of the Chinese companies that is hoping for a piece of the action, and Shi expects that China will auction 3G
icenses in one or two years time, the website report said.
CHINA MAY ADOPT MORE THAN ONE GLOBAL 3G STANDARD
China Unicom, the country's second largest telecommunications provider and the only CDMA operator approved by the government so far, already announced its plan to modify its already-designed construction proposal from a narrow-band mobile system to the CDMA 2000.
"China Mobile is also doing some trial and research work on the 3G system, although it may still wait for one or two years to get approval from the regulator to develop its own 3G system," Wan Ning, an analyst with International Data Corporation (IDC) said.
According to the Wan, China Mobile may ultimately adopt the
GSM-generated WCDMA system, as the company already has 50
million GSM users and will not give up its most important advantage to develop a brand-new system.
"This is also why the government may adopt more than one (3G) standard. About 95% of mobile users are GSM subscribers, and the government would not like to abandon the currently system and build a new one from scratch," he continued.
Eastern Communication's Shi agreed.
"The spectrum is too limited to rely on one standard only," he told BridgeNews.
Meanwhile, analysts also pointed out that China may also approve one more telecom company for its domestically-developed TC-SCDMA standard.
"The risk would be reduced if two or more standards are adopted," Wan added.
CANDIDATES FOR CHINA'S THIRD MOBILE OPERATOR
China has two mobile operators at present, China Mobile and China Unicom.
China Telecommunication (Group) could be the third, and has already shown interest in an operating license to develop its own mobile phone operations, the South China Morning Post reported in June, citing Yin Yiping, the director of the company's Data Communication Bureau.
"I think it is very likely China Telecom will be the third operator to get a license to operate wireless communications in China. This is likely going to happen within one year," Shi said.
And another possible candidate is the military-supported Great Wall Telecom, which is cooperating with Unicom on trial CDMA systems in several mainland cities, IDC's Wan pointed out.
FOREIGN COMPANIES MAY BE ALLOWED TO APPLY FOR 3G LICENSES
"There is no reason why they should not. Both China Mobile and China Unicom are listed on overseas stock exchanges. According to the regulations in China, every entity with more than 25% of its equity listed abroad is a foreign-invested enterprise. So, foreign companies are running China's telecommunication," Shi was quoted as saying by the Finish website.
However, Wan pointed out that the domestic telecom market is not mature enough to allow foreign companies to enter.
"The government needs more time to cultivate domestic telecom companies. But, the ban will be lifted in the future with China's entry into the World Trade Organization," he said. End |
