China has instructed the parent of China Mobile to enroll over 100 million mobile subscribers using homegrown 3G technology within 3 years to ensure the success of the system, a newspaper reported Friday.

A spokeswoman from the Hong Kong-listed mobile service group declined to give immediate comment but said they were awaiting clarification from the parent company.

The parent, China Mobile Communications Corp, was asked to submit a business plan and budget for the launch of the next phase of the 3G TD-SCDMA service in August, the South China Morning Post cited sources as saying.

China Mobile is expected to launch the next 30 billion yuan round of a tender to build the network as early as October, the sources added.

The newspaper reported that newly appointed minister of industry and information Li Yizhong had said the mobile operator should pursue the successful commercial launch of the homegrown mobile standard and set the 100 million users target after meeting executives from China Mobile and other firms.

China Mobile, which has invested over 14.6 billion yuan in TD-SCDMA infrastructure, has been operating a trial network in 8 cities, including Beijing, Shanghai, Shenzhen and Guangzhou, since April. But only about 3,000 subscribers have signed on as paying customers so far, in addition to 20,000 users who were invited for a free trail, the paper said.

Analysts expect China Mobile may have to subsidise TD-SCDMA handsets or charge lower rates to achieve the target, the paper added.

Beijing had in May announced a revamp of the world's largest telecoms industry, which may help wean the sector off foreign technology and highlighted goverment influence on the market.

As part of the overhaul, China Mobile <0941.HK> is likely to be saddled with developing TD-SCDMA, which exists only in China, calling into question the possibility of ever exporting it. Yet the bill for rolling out the commercially untested technology will run into the billions.

Shares of China Mobile gained 1.5 percent to HK$108.60 at midday on Friday.