China Mobile may extend its free TD-SCDMA handset promotional campaign in selected cities well past its recently announced Dec. 31 deadline, in order to attract more customers to switch to 3G, experts told to Interfax on Dec. 3.

"As the government is expected to release 3G licenses soon, China Mobile has been extending promotions for its 3G network based on TD-SCDMA. The company may continue to offer mobile phone terminals for free for a period after the network goes commercial next year," Cheng Dejie, chief consultant at Sichuan Communications Research Planning & Designing Co. Ltd., said.

Under a promotional campaign originally slated to run from April and September, China Mobile is offering TD-SCDMA handsets and SIM cards free-of-charge to customers who put more than RMB 900 ($131.39) into a China Mobile prepaid account. In turn, the company offers to repay the full amount placed in the account, up to a maximum value of RMB 2,100 ($306.57), in 12 equal monthly installments, thus tying customers to the company for a period of one year. The TD-SCDMA handsets offered include models by ZTE, Samsung, LG, Lenovo, New Postcom and Hisense.

"China Mobile extended the campaign in [the southern Chinese city of] Guangzhou past the September deadline to the end of December, in order to attract more users," a customer advisor with China Mobile's Guangdong provincial branch told Interfax. According to her, trial TD-SCDMA users who participate in the scheme are invited to keep the free handset and SIM card, and will continue to receive their repayments after 3G licenses are officially launched.

The promotional campaign had brought the company's number of TD-SCDMA users in Guangdong to almost 120,000 by the end of October, local media outlet, Guangzhou Daily, reported on Dec. 2.

China Mobile's branch in Beijing, one of the eight cities where the promotion was launched, has also decided to extend its offer until Dec. 31.

"The price of TD-SCDMA handsets range from RMB 1,000 ($145.99) to RMB 3,000 ($437.96), making them more expensive than GSM handsets at present. Therefore, mobile phone handsets remain a barrier to operators attracting 3G customers," Cheng said.

According to Cheng, China Unicom, which until the telecom industry restructure earlier this year operated the country's CDMA network, used a similar method of attracting and "locking in" customers for its CDMA services by offering free handsets with two-year contracts. "Rival telecom operators China Unicom and China Telecom may adopt similar strategies in promoting their 3G services, though how long these [promotions] last for will basically depend on the capital each operator can spare," he said.

Wang Na, a researcher for 3g.cn, China's largest WAP research firm, said that as all three telecom operators have signed up to the Full Service Access Network, a worldwide interest group of telecom operators based around standardizing the industry, the release of 3G licenses will herald acute competition.

"As a result, they will need to distribute handset terminals at low prices or even free-of-charge. China Unicom and China Telecom have already outpaced China Mobile in preparing 3G handsets, but they have been less quick in offering promotions to encourage 3G service," Wang said.

Source:INTERFAX-CHINA