China: The plan for a restructuring of China's telecom industry has been finalized but not yet submitted to the State Council, so the formal agreement could take some additional months. It is clear (and likely) that China does not intend to grant 3G licenses before cleaning and streamlining the telecom industry. China is expected to grant no less than four 3G licenses between the end of 2005 and the beginning of 2006, but no timetable has yet been set. The process to allocate 3G licenses will first start when a carrier is approved to operate 3G mobile business. Then the carrier will have to buy 3G frequencies (not through an auction process, but with a price tag of between $12m and $25m). The progress of TD-SCDMA testing is also a public concern in the development of 3G services in China, but is expected to be completed on schedule. Datang Mobile has completed TD-SCDMA trials and results seem excellent. The industrialization of TD-SCDMA system equipment is underway and could be completed in 4Q05.
