China, which already has 600m mobile phone users, is expecting 500m people to sign up for 3G internet and video-enabled services in the next five years, according to Chen Jianqiao, an expert at the Ministry of Industry and Information Technology.

China expects 500m people to sign up for 3G mobiles.
China, which already has 600m mobile phone users, is expecting 500m people to sign up for 3G internet and video-enabled services in the next five years, according to Chen Jianqiao, an expert at the Ministry of Industry and Information Technology.

That estimate could make the Chinese 3G market five times the size of Europe's and will set off a politically-charged scramble among equipment makers, desperate for orders.

Samsung has already stolen a march on its rivals. During the Beijing Olympics, the Korean giant buttered up the authorities by donating 15,000 Samsung 3G telephones to officials, pre-loaded with £300,000 of free calls.

Meanwhile, Motorola, which made a net loss of $397m (£266m) in the third quarter of 2008, has invested heavily in China, where it has a 15pc share of the handset market, almost double its average market share elsewhere.

Bruce Brada, a senior vice president, said the company was "venturing a bet" that the introduction of 3G in China would help it reverse its ailing fortunes.

Motorola was one of the first companies to launch a 3G handset on China's domestic TD-SCDMA format in June and the company has signed an agreement with China Mobile, the world's largest mobile operator, to work on a joint research project. "Motorola has so far managed to avoid complete collapse by relying on its strength in the Chinese market," said He Qi, an industry analyst.

China has decided to run three separate 3G networks, with each of its three licensees using its own technology. China Mobile will build and operate the domestic TD-SCDMA standard, which has been unreliable in the past. China Unicom will run WCDMA and China Telecom will run CDMA 2000, both of which have been tried and tested across the rest of the world's 3G networks.

The government said the three companies would spend £30bn next year building their networks. Nokia Siemens Networks, Alcatel, Telefon and Ericsson are all vying for contracts, and Nokia Siemens has recently boosted its China workforce to 1,200. However the government may choose domestic suppliers such as Huawei and ZTE in order to boost its home-grown industry. Duncan Clark, chairman of BDA China, a consultancy, said less than half of China's 3G orders would go to foreigners.

The share price China Mobile, China Unicom and China Telecom all dropped on profit-taking, after days of speculation that the licenses were imminent.
 

Source:telegraph