China's 3G Move to Trigger Spending

With the restructuring of its telecom operator community all but complete, China is set to hand out three 3G licenses in the coming weeks, possibly before the end of this year, in a move that's expected to kickstart a massive round of wireless infrastructure spending. (See China Begins Carrier Revamp and China Unicom Names CEO.)

According to various reports from China, including this one from Bloomberg, Li Yizhong, China's minister for Industry and Information Technology, told a news conference that licenses would be awarded either this month or in early January, and that operators were expected to spend at least 200 billion Renminbi (US$29.2 billion) in 3G-related capital expenditure next year.

A loose timetable for 3G license awards was announced earlier this year as part of the overhaul of China's telecom services sector, and the country's three major carriers have been gearing up for next-generation wireless. (See China to Get 3G – At Last!, Unicom Plans Capex Blowout, China Mobile Preps LTE Network, China Mobile to Unleash 3G Next Year, and Good CDMA News.)

China Mobile Ltd. (NYSE: CHL) is set to get a license to operate a network based on China's home-developed 3G standard, TD-SCDMA. China Telecom Corp. Ltd. (NYSE: CHA) will be awarded a CDMA 2000 license, while China Unicom Ltd. (NYSE: CHU) will get a WCDMA license.

China's 3G network rollouts will help boost the global telecom sector at a time when the worldwide market is set to shrink, making the contracts set to be handed out by China's carrier trio even more precious to the equipment manufacturers. (See Sizing Up AT&T's Cuts (and Chops) , Capex Watch: Telecom Italia Plans Cuts, Capex Watch: Expect Shrinkage in 2009, and Emerging Markets Offer Capex Hope.)

Local vendors Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) are expected to benefit the most from the new spending rounds, while the likes of Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Nokia Networks are also expected to pick up deals.

— Ray Le Maistre, International News Editor, Light Reading

lrmobile_kumaramitabh 12/5/2012 | 3:25:15 PM
re: China's 3G Move to Trigger Spending 3G and WiMAX Auction starts to roll in India with release of Information Memorandum!
The Department of Telecom has today released the Information memorandum setting in motion the process of 3G and Broadband spectrum auction. The document is available on the DOT website ( http://www.dot.gov.in/as/Aucti... The start of the 3G auction is from 16 Jan 2009 and the BWA auction begins two days after the closure of the 3G auction.

For WiMAX, the spectrum will be auctioned in the 2.3 and 2.5 GHz bands. Three blocks of 20 MHz are on the block for auction. The exact frequencies vary from service area. For Delhi and Mumbai these are as follows:

2305.0-2325.0 MHz
2327.5-2347.5 MHz
2535-2555 MHz

Spectrum in the 2635-2655 MHz band with 20 MHz bandwidth has been assigned to MTNL in Delhi and
Mumbai and to BSNL in all the service areas except three service areas where they have been assigned spectrum
in FDD mode.

The eligibility requirement is to be ( or become) a Class A ISP, or a Universal Access Service Provider ( UAS) or a Cellular Mobile Service Provider ( CMTS).
DoT guidelines stipulate that a UAS license can only be awarded to an Indian Company. Hence, foreign applicants will need to form an Indian subsidiary to obtain the UAS license. However they are allowed to participate
in the Auctions directly, and apply for a license subsequently. ISPs as per present policy can have FDI upto 74%.

There is a rollout obligation of coverage of 90% of service area within 5 years.

In addition to the money paid for auction there is an annual charge of 3% of adjusted gross revenues (AGR). In case of BWA ( WiMAX) the revenues to be counted include those from VoIP, IPTV and regular internet access.

The license will be valid for 15 years.

More on this later..

gbmorrison 12/5/2012 | 3:25:10 PM
re: China's 3G Move to Trigger Spending They have been saying this for so long... I remember hearing "before the end of the year" -- seriously -- in 2004. The network equip guys have spent a fortune trying to get ready and win this business.
spc_rayella 12/5/2012 | 3:24:50 PM
re: China's 3G Move to Trigger Spending Now the Chinese government is, reportedly, putting the capex figure for 3G rollout in China at $41 billion during the next two years.

See this Reuters story:

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