Monday, May 16, 2005

China Should Hold off on 3G Telecom Rollout but Delay Unlikely

From Forbes: China Should Hold off on 3G Telecom Rollout but Delay Unlikely

"China should hold off on rolling out a third-generation (3G) mobile telecommunications network, at least until after industry restructuring, but it is unlikely to do so, CLSA head of telecoms Francis Cheung said."
'China first needs a wholesale restructuring of the industry, the reason being because 3G is too expensive,' he said."

"'China has four operators - China Mobile, China Unicom, China Telecom and China Netcom - if everyone gets a 3G license there's four 3G networks,' he said. Telecom and Netcom would seek 3G licenses because of an expected deterioration in fixed-line profitability, he said.
Unicom already has two networks, GSM and CDMA, and is 'not doing well with either one of them, so it should sell one of these networks to China Telecom or China Unicom,' he said."

"Cheung said there is no first-mover advantage in mobile telecoms technology and argued that the reverse may be the case.
'China came to 2G very, very, late, and because they came late they got all of the equipment cheap and all of the handsets cheap,' he said. 'That's one of the reasons they went from 1 mln (subscribers in 1995) to 330 mln today. There's not a lot of advantage in being first; there is a lot of risk with being first.' "

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