China to issue 3G licenses, merge telecoms majors
China will issue three licenses for high-speed third-generation mobile phone services and called for a merger of China Unicom and Netcom, two of its four biggest telecoms providers, in a long-awaited industry revamp.
The government said on Saturday it would also call on China Telecom, the country’s biggest fixed-line telecoms carrier, to purchase wireless telecoms company Unicom’s CDMA network, fleshing out details of the restructuring following an initial announcement on Friday.
ABN AMRO has valued the Unicom network at HK$40 billion ($5.1 billion).
China’s 1.3 billion people can now look forward to joining others in advanced economies who already enjoy blazing-fast Internet access, games and a host of multimedia content from maps to music on their cell phones.
The 3G licenses and the industry revamp are also set to unleash billions of dollars in spending for network gearmakers such as Ericsson, Motorola, Nokia, Nortel and Siemens, as newly merged firms expand to compete.
Although analysts are quick to point out that a full launch of 3G services is years away, allowing three nationwide providers increases choice and promises to hold down user fees.
On a corporate level, it will also help address the perennial complaints of fixed-line firms at being left out of the world’s largest and fastest-growing major telecoms market advance america cash advance. Analysts say heightened competition would in theory benefit users by also enhancing service and content quality.
“The move will help foster a more balanced competition landscape for the industry, create a fairer playing ground.” said Michael Meng, an analyst with Citigroup.
Filed under: term by Guru