Finally. Hooray. Licenses for 3G, or third-generation telecommunications standards and technology for mobile networking, have been issued after almost 10 years of debate and waiting but interestingly, not every telecommunications firm in the industry will benefit from the next-generation mobile services immediately.
Telecom carriers, such as China Mobile and China Telecom, may initially lose money in th1eir 3G business.
To other players in the industry chain like equipment makers, handset vendors and service providers, 3G is, however, an irresistible opportunity.
A huge market
China issued 3G licenses on Wednesday to the telecom carriers, with China Mobile getting the TD-SCDMA network, China Unicom the WCDMA and China Telecom the CDMA2000 technology.
Actually, the pie is big as it will attract 280 billion yuan (US$41 billion) of direct investment by the end of next year and the 3G market is forecast to be worth about 2 trillion yuan, analysts said.
"The license issuance will boost investment and stimulate the Chinese economy. It does make sense (to issue the 3G permits) in the tough environment," said Li Yizhong, minister of industry and information technology.
Equipment firms
"Equipment makers are the biggest winners in China's 3G, even during a global financial crisis," said Sandy Shen, a Gartner's analyst.
The telecom equipment makers, such as Ericsson, Alcatel-Lucent, Nokia-Siemens, Huawei and ZTE, will seek every opportunity to tap the vast network equipment market in China this year when demand in other regions shrank for the financial crisis.
Alcatel-Lucent Shanghai Bell Co, which contributed 10-15 percent revenue to Alcatel-Lucent's global income in 2008, will focus more on the domestic market, especially 3G opportunities, this year, Olivia Qiu, ASB's president, said during a press conference yesterday.
Chinese telecom equipment makers will also benefit from 3G, Chen Yunhong, an analyst at Sinolink Securities, said.
The shares of Shenzhen-listed ZTE, China's biggest public equipment maker, have jumped more than 70 percent since November, versus an 18 percent growth for the Shenzhen stock index in the same period.
The 3G wave
"It (3G) is the key point of Dopod's strategy in China this year," said Dennis Chen, Dopod Communications chief executive. "The 3G is the opportunity for the smart phone's development."
Handset makers like Nokia and Dopod launched 2G phones in the domestic market as 3G was not ready in China then. Phone makers often spend time and money to "cut" the 3G functions, like video calls, in the models they sell in China.
Once the 3G networks are set up in China, phone vendors can launch the same models globally, which will save costs, the phone makers said.
Nokia will "immediately" launch the 3G version of its N95 or E71 in China when the WCDMA network is ready, according to the world's No. 1 phone maker.
For homegrown phone makers, they are prepared for the battle of 3G phones. "Lenovo Mobile has launched TD-SCDMA phones and invested heavily to develop high-end WCDMA and CDMA phones," said Chen Jin, Lenovo Mobile's Shanghai general manager.
And with 3G a reality in China, the iPhone 3G may finally come into the market.
