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China’s pending 3G license auction continues to hold the mobile community in suspense. The new Pyramid Research report, “3G in China: What’s Next for 3G Licensing?” assesses the potential outcomes of the auction and tracks the market opportunity. The new report stipulates that the infrastructure opportunity will be $9bn for vendors in the 2006-2009 period with 2007 alone generating approxiamately $4bn, based on data from Pyramid Research forecasts. Additionally, 3G subscribers are expected to account for 15% of China’s mobile market by 2010.
Regarding the 3G auction, Pyramid Research expects three nationwide 3G licenses to be awarded with one going to a fixed operator. An interesting scenario discussed in the report assesses the possibility of China Telecom and China Netcom consolidating and offering a nationwide 3G solution. Another scenario examines the possibility of dissolving China Unicom and dispersing its GSM subscriber base to China Telecom and the CDMA network to China Netcom – making way for both a TD-SCDMA and CDMA2000 operator. The transfer of two top executives from China Mobile and China Unicom to fixed line operator China Telecom signals that mobile will become a key component in the latter’s strategy.
Adding to the importance of the 3G auction will be the future of China’s 3G technology TD-SCDMA. The Chinese government would like to eliminate its dependence on Qualcomm, prop-up domestic vendors like Huawei and ZTE, and in the process bolster China’s manufacturing industry. Additionally, if TD-SCDMA is a success, China would be able to export the equipment to developing countries as a cheaper alternative to WCDMA.
This article is based on the Pyramid Research report, 3G in China: What's Next for China's 3G Licensing?
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