U.S.-based telecommunications equipment maker UTStarcom Inc. had won a license to make and sell its mobile handsets in China, the Beijing Times reported, citing a company source.

"UTStarcom has won a license from the National Development and Reform Commission (NDRC) through unit UTStarcom Telecom Co. in eastern China's Hangzhou," the unnamed source was quoted as saying.

UTStarcom would be able to produce GSM (global system for mobile communications) standard and CDMA (code division multiple access) standard mobile phones in China, the source said.

UTStarcom, the world's largest vendor of fixed-line based PHS (personal handy system) handsets, had been producing mobile handsets in China through a licensing contract with Beijing-based CEC Telecom Co. Ltd. (CECT) since January.

UTStarcom declined to comment on the possible influence the new license might have on its cooperation with CECT, a subsidiary of Qiao Xing Universal Telephone Inc.

Since the NDRC launched new rules in February making mobile handset production licenses more accessible to telecom companies, four other firms had won licenses, with a combined annual production capacity of 14 million units, the report said.

Earlier domestic media reports said mobile handset makers in China were expected to have a combined output of 260 million units this year, of which 160 million units would be exported and 80 million sold domestically, leaving around 20 million destined for inventories.

(Shenzhen Daily July 6, 2005)