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Jan. 2, 2009

Officials in China have approved initial plans to issue 3G technology operating licenses to the wireless industry.

This represents a decision that will result in billions of dollars spent on infrastructure in China during the next two years.

The State Council has announced that it has agreed to begin issuing licenses to wireless phone operators for 3G networks. The decision was made during an executive meeting and then announced on the government’s website Dec. 31.

The move represents a big opportunity for mobile network and wireless handset makers hoping to cash in on the world’s largest wireless market.

The Chinese government also announced it would invest $41 billion to develop 3G networks in 2009.

According to a statement issued by the council, "Issuing licenses to wireless operators to develop 3G networks plays an important role in boosting domestic demand and optimizing the telecommunications market competition pattern."

Overall, three technological standards will be used for the 3G networks, including Chinese-developed TD-SCDMA, Europe’s W-CDMA and North America’s CDMA-2000 technology.

Chinese officials have said that major efforts will be made to enhance the industrialization of core chips, terminals and test equipment for its home-grown TD-SCDMA standard.

According to China, government officials view TD-SCDMA as a “landmark of Chinese innovation” and the country will continue to support the development, deployment and industrialization of the technology.

The top three telecom giants in China are expected to receive 3G licenses by early February. China Mobile will use TD-SCDMA, China Unicom will use W-CDMA and China Telecom will use CDMA-2000.

With this announcement, Tang Mingjun, a telecom analyst with Shenyin Wanguo Securities in Shanghai says that Chinese wireless companies that are awarded the contract will have different responses from the market.

According to published reports, China Mobile has spent billions of dollars on developing TD-SCDMA.

ZTE Corp. and Datang Telecom Technology are also major supporters of the technology in China.

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    This article was featured on Business 5.0 and on Tech Blog.

Source: CWNC.