Germany's Siemens expects a delay in China's highly anticipated award of third-generation (3G) mobile licenses, and now expects them to be delivered in the first half of 2006, adding to the list of foreign executives who expect a longer wait.

Most industry observers and executives had previously expected China to issue three or four 3G licenses in the second half of this year, following several delays to previous expectations.

But many are now starting to doubt that the issue of licenses --expected to spark billions of dollars of buying of new telecom equipment --will occur this year at all.

An executive from Nokia, the world's largest mobile phone maker and also a major supplier of mobile telecom equipment, said late last month he expected licenses for 3G, which enables high-speed data applications like video calling, to most likely come out in the first half of next year.

Last week, Carl-Henric Svanberg, chief executive of Ericsson, the world's largest telecom equipment maker, also said he expected China to award the licenses in the first half of 2006.

"We also expect that they will come out at the beginning of next year, in the first half," Siemens China CEO Richard Hausmann said.

Hausmann said a pending restructuring of China's telecom industry --another highly anticipated event --could be the main reason for a potential delay.

Many expect the announcement of such a restructuring to come first, to be accompanied or possibly followed a short time later by the award of 3G licenses.

Many also expect at least one of the three or four 3G licenses to require its holder to build a partial or complete network based on a Chinese-developed standard known as TD-SCDMA.

Siemens, which helped pioneer similar technology in Europe, is the lone major backer outside China for the standard, which is said to have performed poorly in several major field tests.

Some industry watchers believe China may be delaying its issue of 3G licenses to wait for the technology to mature more and become more commercially viable.

Siemens last year formed a US$100 million-plus joint venture with Huawei Technologies to develop technology for the standard.

"We strongly believe in it," Hausmann said. "We have formed the joint venture which is very successful and we are prepared to go into first trials. We will, depending on the availability of handsets, also be able to start commercial installation at the beginning of next year."

(Shenzhen Daily September 8, 2005)