Telecommunications Market Restructuring in China and Competition over 3G Services

In the end of May 2008, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Finance in China jointly announced the long-awaited telecommunications market restructuring plan named Announcement on the Reform of the Structure of the Telecommunications Sector.

There had been a rumor that China would overhaul the market to have only three telecom companies. Following the official announcement, the six telecom companies in China will merge into three integrated companies, China Mobile, China Unicom and China Telecom.

It is generally expected that the issuance of 3G license will be possible at the end of this year or beginning of the next year when the restructuring process and mergers are over. It is a foregone conclusion that the government will issue TD-SCDMA license to China Mobile, WCDMA license to China Unicom, and CDMA EV-DO license to China Telecom.

This report focuses on identifying the major and current issues in China's mobile market which will be restructured into three players according to the government policy, as well as provides an analysis on the market after the restructuring. In particular, the most important issues are the growth potential of TD-SCDMA that China has been pursuing, and the possibility of CDMA's vitalization after the technology will be allocated to China Telecom.

The report addresses key issues surrounding 3G after 2007, market competition and the positioning of players in the future and the tasks of the Chinese government to promote 3G services.

Research Method For the report, ROA Group has collected data and information on the Chinese telecommunications market, including press releases, news articles and market reports. Some information on this report is based on interviews with professionals in the industry, as well as information sources in ROA Group's own database.