The upcoming third generation mobile communication (3G) will have a huge impact on China's telecom sectors. The manufactures of main equipment-building, fiber-optical and optical cable, terminal building, system integration and other related sectors will all benefit from 3G.

It is urgent that the manufactures of network equipment gain a new round of investment from the 3G operators. Even some foreign manufactures have begun to make use of the advantage of 2G or 2.5G to earn possible investment form the 3G operators.

China CAPEX Annual Report 2006 by Analysts International show that if China issues its first 3G license this year, the first 3G network size is expected to reach 20 million lines from 10 million lines in order to meet customers needs. If every line costs 1000 Yuan, the total investment of the first 3G equipment will amount to 10 - 20 billion Yuan.

If China Mobile gains the first 3G license, it has complete capability to offer 3G services with its strong capital.

If China Telecom gets the license, it is able to offer 3G services with the help of circulating funds.

If China Netcom or China Unicom is issued the license, neither of them could afford to build the 3G network. China Unicom sold Asia Netcom earlier with the price of 350 million USD to accumulate capital. However, neither China Netcom nor China Unicom could offer the 3G services independently. The report also suggests the two companies merge to jointly offer 3G services.

By People's Daily Online