Chinese government hints at 3G rollout date

Telecom regulators in China may finally be preparing to issue 3G (third generation) telephony licenses, if a report in a state-run newspaper is any indication.

Commercial use of 3G will begin this year in China, according to a report by the Development Research Center of the State Council, China’s cabinet, the English-language China Daily said Thursday. “Commercial use” was not defined, and the report made no mention of a large-scale consumer roll out. However, the State Council’s report predicted a launch for sometime later this year.

China’s Ministry of Information Industry (MII), the nation’s telecom regulator, has never released a timetable for 3G licensing or roll out or said how many licenses it will issue, although industry participants generally believe MII will offer six licenses. Foreign carriers will not be allowed to apply for licenses.

Chinese officials and industry executives have stated they want 3G in place in time for the August 2008 Olympic Games to be held in Beijing. However, with most analysts now predicting an early 2007 debut for 3G, that would leave operators with less time to test and implement the network before the Olympics than had previously been hoped.

One issue has been the selection of a 3G standard. China’s own standard, TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) is favored by local enterprises and government officials, but may delay wide uptake due to a lack of support from equipment and handset manufacturers.

“While a decision on 3G this year would be good news, the authors of the report underestimate the timing of an actual commercial roll out,” said David Wolf, chief executive officer of Wolf Group Asia Ltd., a Beijing-based technology consultancy. “Commercial handsets could be available within three to six months, but building and testing a nationwide 3G network would require nine to 12 months before commercial service could begin.”

Wolf predicted that China United Telecommunications (China Unicom), which already operates China’s only CDMA (Code Division Multiple Access) network, could be first out of the gate. “Depending on specifics, China Unicom could be the first to launch commercial 3G services, given the relative ease and cost of upgrading its network compared to other operators.”