China experiences the onset of a 3G boom

All three Chinese telecommunications companies received 3G licenses last week from the Ministry of Industry and Information Technology, and each has a different standard of choice.

China Mobile, the largest mobile phone operator in China, will build and operate a TD-SCDMA 3G network. The 3G standard is a Chinese development that differs from W-CDMA in that it uses Time Division Duplexing, a method of separating uplink and downlink signals and dynamically allocating spectrum to each. Over the weekend, the company told the Beijing News that its plan for the network includes a 58.8 billion yuan investment ($8.6b/ €6.43b) on some 60,000 TS-SCDMA base stations and have coverage in 238 cities.

China Unicom, meanwhile, will be kicking off its W-CDMA network on May 17. That company said its 3G investment will be approximately 10 million yuan, growing the existent network it has tested in ten major Chinese cities.

First out of the 3G gate will be China Telecom, which announced today that it will be launching its own CDMA-2000 services at the end of February in 100 cities around the country. While more accurately considered a 2.5G connection, China Telecom took over the CDMA-2000 network that was run by China Unicom and built on Ericsson solutions.

This explosion in demand for 3G telecommunications equipment will cause a jolt in sales of semiconductors from such companies as ZTE and Datang Telecom Technology, and then for mobile phone manufacturers, according to Chinese IT consulting firm CCID. That group projects China's total 3G hardware investment to reach 200 billion yuan by the end of 2009.