BEIJING (MarketWatch) -- China could issue third-generation mobile-phone licenses "very soon," the state-run China Daily reported on its front page Tuesday, citing a government minister.
"I cannot provide a specific timetable, but it could happen very soon," the English-language newspaper cited Wang Xudong, who heads the Ministry of Information Industry, as saying. He was speaking at an international telecommunications conference in Hong Kong, it said.
Analysts downplayed the significance of Wang's remarks, saying they don't offer clues to a precise time for issuing 3G licenses in the world's largest mobile-phone market by users. The launch of 3G in China will likely boost equipment sales at the likes of ZTE Corp., Huawei Technologies Co., Nokia Corp. and Telefon AB LM Ericsson.
Minister Wang could, however, be signaling that his ministry, which regulates China's telecom sector, wants to push forward the introduction of 3G, said Eliza Liu, an associate director at Fitch Ratings (Beijing) Ltd. She added China will "most likely" issue 3G licenses in the first quarter next year.
The report also cited China Netcom Group Corp. (CN) Chief Executive Zuo Xunsheng as saying during the conference 3G licenses could be issued as soon as February next year.
Eagle Zhang, vice president of telecoms and technology research firm Analysys International, said China will likely issue 3G licenses in the first half of next year "at the earliest," because it still needs to decide on how to restructure the industry.
He also said China needs time to let a locally developed 3G technology, Time Division Synchronous Code Division Multiple Access, become a more competitive alternative to the two other 3G technologies, Wideband CDMA and CDMA2000.
China has two mobile operators, China Mobile Ltd. (CHM) and China Unicom Ltd. (CHU), and two fixed-line carriers, China Telecom Corp. (CHA) and China Netcom Group Corp. (CN) Some analysts expect China Unicom, which now operates both CDMA and Global System for Mobile Communications networks, could be split and merged with other operators, if China issues three 3G licenses.
According to a Xinhua News Agency report Monday, Wang said, "I haven't studied or contemplated the matter," when asked about possible industry restructuring.
Wang could be expressing the MII's opinions and not the central government's preferences, said Zhang, adding the higher levels of the central government will likely decide on restructuring later this year or in early 2007.
Analysts expect the State Council, China's Cabinet, will make the final decision on 3G licensing and industry restructuring. The State-owned Assets Supervision and Administration Commission, which is responsible for the state-owned parent companies of China's operators, will also likely be involved in restructuring the industry
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