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March 20, 2007 12:23 am

China Mobile to build trial 3G networks

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China’s dominant mobile phone company is poised to spend around Rmb40bn ($5.2bn) building large-scale third-generation wireless networks based on a home-grown standard, even though Beijing has yet to issue licences for such services.

The scale of the construction highlights China's efforts to give the locally developed TD-SCDMA 3G mobile standard a market advantage over rival technologies. Beijing has long cloaked the nation’s 3G plans in secrecy.

The long delay in issuing 3G licences is thought to be tied in with the government’s determination to give TD-SCDMA’s developers more time to get it ready to compete against Europe's favoured standard, WCDMA, or the US-backed CDMA2000.

Chen Haofei, secretary-general of the TD-SCDMA Forum, the industrial forum promoting the Beijing-backed standard, said the state-controlled parent of China Mobile had already invited bids to supply around Rmb20bn in equipment for “trial” 3G networks in eight Chinese cities.

Mr Chen said tender invitations had been sent to vendors such as Nokia, Ericsson, Shenzhen-based ZTE, Alcatel Shanghai Bell and local TD-SCDMA developer Datang Mobile.

Other Chinese operators are barred from beginning work on networks based on rival standards while they wait for a licence. China Mobile and its Hong Kong-listed unit declined to comment as did the Ministry of Information Industry, China’s main telecommunications sector regulator.

In an interview with the FT last week, a senior representative of China’s telecoms industry denounced the government’s handling of 3G licensing as slow, opaque and ineffective.

Shi Jixing, vice-chairman of the China Mobile Communications Association, said local operators did not want to adopt the TD-SCDMA standard. However, Beijing appears determined to force China Mobile to use the local standard.

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