Its Beijing-based subsidiary - Datang Mobile Communications Equipment Company - will use indigenous third-generation technology to make real products, said Zhou Huan, president of the parent company and the new subsidiary.

"It will also realize the Chinese people's dream of controlling core telecom technology," he said.

Development of indigenous 3G technology will advance the upgrading of related sectors, including semiconductors, electronic equipment, software and Internet content, Zhou said.

The Chinese mainland market for 3G technology and the related businesses will be worth up to 24 trillion yuan (US$2.9 trillion), he estimated.

China's own 3G technology - TD-SCDMA (time division synchronous code-division multiple access) - is the first international technology standard developed locally.

Zhang Qi, director of the Electronic Products Department of the Ministry of the Information Industry, said the government supports the development of this home-grown technology and encourages more companies to get involved.

Datang Telecom has invested 150 million yuan (US$18 million) in its mobile-phone subsidiary but Zhou said: "That is far from sufficient for capital-hungry mobile telecommunications."

Many international leading brand names have shown an interest in the new firm and want to enter the Chinese telecommunications market via investment in Datang, Zhou told China Daily.

Siemens and Intel are holding negotiations with Datang to try to become strategic investors in the new equipment vendor, according to company sources.

China's mobile telecom market became the biggest in the world in the middle of last year and is being transformed from second-generation to third-generation.

The government will launch field trials of three possible third-generation technologies and decide which it will adopt.

It is widely believed that the government will make a decision before the end of next year although it has been tight-lipped up to now.

Datang is rushing to market its 3G technology as its two counterparts are stronger and more mature.

The Chinese technology was developed later than its two counterparts - the United States-developed CDMA2000 and the Europe-developed WCDMA (wide-band CDMA).

(China Daily March 10, 2002)