China unlikely to issue 3G licenses this year

The Chinese government may consider delaying the 3G licensing process, desiring time to develop the homegrown TD-SCDMA technology, analysts have said.

Last week rumours had spread that the government was to begin issuing licenses next month - rumours which the government has neither been confirmed or denied.

But a number of analysts have told the South China Morning Post that the government seems in no hurry to issue 3G licenses due to the issue of dependability of TD-SCDMA technology.

Daiwa Institute of Research analyst Marvin Lo told the Post it would prove risky to issue 3G licenses if TD-SCDMA technology was not yet stable.

Fellow analyst Fu Liang believes the government is most likely to issue 3G licenses in May next year, and very unlikely to issue licenses before March.

Meanwhile, a report published this week by Research and Markets (RAM) lends credence to the analysts' comments.

According to the report, RAM continues to expect the 3G licensing process to take place in early 2009, although the researchers are quick to point out that there have already been a number of indefinite delays.

The report also states that the TD-SCDMA will not be the magic bullet that will allow rival operators to gouge chunks from China Mobile's market share.

Not only is China Mobile's management, brand and subscriber base second-to-none worldwide, the company is focusing its expansion strategy equally between urban and rural markets, the latter of which will not be affected by 3G for some time.

The standard will at least have the support of the world's largest handset manufacturer - Nokia reaffirmed its commitment to the TD-SCDMA standard at the Mobile Asia Congress last week.