China 3G technology is coming

After step into the 2009, the 3G is coming to China. Now it is as new communication field, many China mobile manufacturer and 3 China net operate all are come with this market. Also come with the foreign handset makers.

China has been saying it would introduce 3G since the beginning of the decade but faced huge obstacles. Chief among these was its lopsided telecoms industry, dominated by China Mobile, in which Vodafone has a small stake. Restructuring has since carved up the market into three players. The 3G licences will further redress the balance: licences will be apportioned to give its competitors a technological advantage. Thus China Mobile, which has 450m subscribers, will be stuck with China’s homegrown TD-SCDMA technology. Its smaller peers will, meanwhile, adopt proved international standards, like WCDMA.

China Mobile will suffer from the increased competition. Most foreign handset makers are barely bothering to make phones for its system – limited choice is another reason why its standard is unlikely to flourish. But the long-awaited news is not especially good for investors in any Chinese telecoms business. They are already big spenders – in the first half of 2009, China Mobile’s capital expenditure was almost one-third of sales. Now capital expenditure will rise across the board. Furthermore, 3G is by no means a must-have for the average Chinese user. It has been a long wait and, for many, not especially worth it.

All three players will ratchet up spending. Beijing-based consultancy BDA calculates that $16bn has been earmarked for TD-SCDMA with a further $28bn for the rest. In the past, this would have been a boon for international suppliers such as Sweden’s Ericsson, which vacuumed up 2G contracts. Now it is likely to get only 10-20 per cent of the WCDMA business, BDA reckons, owing to the rise of local suppliers. The likes of Huawei and ZTE are already snaffling supply contracts.

So we think this new opportunity is a good point of China electronics manufacturer and China economic.

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