3G proves cash cow for telcos

BEIJING, Aug. 21 -- China's home-grown 3G market revenue reached 7.2 billion yuan (949 million U.S. dollars) in the second quarter.

ZTE Corp, Datang Mobile and TD Tech were the top three players in the period, a Beijing-based IT research firm said yesterday.

China started the construction of TD-SCDMA (time division-synchronous code division multiple access) networks in 10 cities nationwide in the first quarter. Thus, no comparative year-on-year figures for TD-SCDMA market size are available.

Shenzhen-based ZTE led the China TD-SCDMA access network with a 45.8-percent market share, followed by Datang's 27.2 percent and 14.9 percent for TD-Tech, a joint venture between Huawei Technologies and Nokia Siemens Networks, according to the research firm Analysys International.

China Mobile invested 26.7 billion yuan on TD-SCDMA network construction in Beijing, Tianjin, Shenyang, Shenzhen, Qinhuangdao, Xiamen, Shanghai and Guangzhou, which is in preparation of the next generation for the Beijing Olympic Games in 2008.

"China Telecom and China Netcom also launched their TD-SCDMA network expansion in the second quarter of 2007," Analysys said in its statement. "The expansion is based on the original TD-SCDMA network in Qingdao and Baoding."

ZTE posted a 33-percent jump in first-half profit this year, mainly fueled by "China Mobile's order of TD-SCDMA equipment," the company said in its fiscal report.

ZTE also plans to raise four billion yuan through the sale of five-year convertible bonds to finance the research and manufacture of home-grown 3G products.

China will issue 3G licenses, probably at the beginning of next year. The Ministry of Information Industry said the country will provide 3G services during the Olympics in 2008.

"The coming 3G will bring a capital feast to equipment makers and handset vendors," said Wang Jianping, an official at the China Center for Information Industry Development.