China has finally decided to open up its vast market for the next generation 3G mobile networks by issuing them with licenses. The move is  expected to open up a vast $41 billion worth of market for makers of 3G equipment.

The State Council, which is the country's cabinet, today decided to allow the issuance of licenses based on two international 3G standards and a locally developed technology standard called TD-SCDMA, which has the blessings of the government. Two globally accepted standards, WCDMA and CDMA 2000, have also been allowed.

The decision, which was taken at a meeting of the State Council, presided over by premier Wen Jiabao, was taken after taking into account that fact that the country's major telecommunications companies have completed their restructuring programmes, an official statement said.

"The issuance of 3G licenses plays an important role in driving domestic demand and promoting the competitive structure of the telecommunications sector," the State Council statement said.

The government made it clear that it would continue to support the development and application of the TD-SCDMA standard, which has been produced after domestic companies invested millions of dollars in it. The move for creating a local standard was prompted by the need to avoid paying expensive royalties to international players. It is now possible that China would actually earn some royalties by licensing the homegrown standard in foreign markets, sources said.

The official statement did not specify which of the local companies would be using which standard. But that government had earlier indicated that the China Mobile, the biggest player, would be allowed to use the homegrown standard. China Unicom, another local player would use WCDMA network and the third player China Telecom would be given permission to use the CDMA 2000 technology, it said earlier.

The government has kept its promise made last July when it said that 3G licenses would be issued after a six-month period of restructuring of the telecommunications sector.

The restructuring involved the merger of China Mobile with the smaller player China Tietong Communications while the CDMA mobile network assets were transferred from China Unicom to China Telecom. This made it possible for the three companies to be reorganized as players in both the fixed line and wireless markets.

Source:timesofindia