China's State Council has announced that it approves China's Ministry of Industry and Information Technology to start the issuing of 3G licenses and it will continue to support the development and promotion of the Chinese-made TD-SCDMA wireless technology.

The State Council says the issue of the 3G licenses will play an important role in stimulating domestic demand, optimizing the competition structure of China's telecommunications market and promoting the maturation of TD-SCDMA industry chain. At present, the restructuring of China's telecommunications operators has been basically completed and it is time for the issuing of 3G licenses.

The licenses will be issued to the Chinese-made TD-SCDMA standard as well as two other globally accepted standards, WCDMA and CDMA2000.

Prior to this, China Mobile said it would take actions to win the government's support in the development of TD-SCDMA and constructed TD-SCDMA network-based wireless cities around China. The company has selected Shanghai and Guangdong as trial cities and its 188-prefixed mobile phone numbers, which are for TD-SCDMA, have been formally launched. At the same time, China Telecom also launched its 189-prefixed CDMA mobile phone numbers around the country and China Unicom will use 186-prefixed mobile phone numbers for its WCDMA business.

As for network construction, China Mobile has finished its TD-SCDMA network coverage in 10 Chinese cities and its second-phase project, which is expected to be completed in the first half of 2009, will cover 38 cities.

China Telecom is currently upgrading its CDMA networks and the company plans to complete its network upgrading in Beijing, which covers nearly 4,000 CDMA base stations, before February 28, 2009.

China Unicom's first batch of WCDMA trial networks are undergoing internal testing in Shanghai, Shenzhen, Foshan, Liuzhou, Zhengzhou, Baoding and Wuxi. According to the company's schedule, it will complete WCDMA network deployment in major Chinese cities by mid-2009 and start 3G network operation in medium and large cities before the end of this year.

Li Yi, a director at MIIT, says that China will invest CNY280 billion in 3G in the next two years, of which CNY150 billion is planned for 2009.