China lifts roadblock for 3G phones

The Chinese government has approved licenses that will permit high-speed mobile phone network services, a move expected to help bring higher-end services.

Stephen Shankland principal writer
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China's state council said it's approved licenses for higher-speed 3G mobile networks, a move expected to help bring higher-end services to phone users in the country.

Under a telecommunications reorganization plan whose creation delayed issuance of the licenses, China Mobile is set to receive approval for a network using TD-SCDMA technology, a standard backed by Beijing, according to a Reuters report Wednesday. China Unicom would be awarded a WCDMA license and China Telecom a CDMA 2000 license, according to the report.

WCDMA and CDMA 2000 standards are mature and globally accepted but come with royalties the Chinese government has sought to avoid.

"China Unicom and China Telecom will see a positive reaction in terms of share price reaction," Reuters quoted Tang Mingjun, a telecom analyst with Shenyin Wanguo Securities in Shanghai, as saying.

The Chinese Ministry of Industry of Information, which expects Chinese telecommunications companies to spend about $41 billion on the next-generation phone equipment, has said the licenses are due to be issued by early 2009, according to the report.