China's 3G licenses coming later this year

China is likely to issue licenses for 3G (third-generation) mobile services later this year, a Motorola executive said Wednesday.

"I think the timing is going to be more towards the end of this year rather than earlier," Simon Leung, president of Motorola's Asia-Pacific operations, said at a press briefing in Beijing.

Many observers had expected the 3G licenses to come during the first half of 2006. However, 3G licenses are not likely to come until Chinese operators conclude a planned trial of China's homegrown 3G technology, TD-SCDMA (Time Division Synchronous Code Division Multiple Access), Leung said. Those trials are not expected to end until later this year.

The Chinese government has not offered a specific timetable for when 3G licenses will be issued, but Ministry of Information Industry (MII) officials have hinted they will be issued sometime this year.

Telecommunication equipment makers like Motorola are counting on the introduction of 3G services in China to bring them billions of dollars in expected equipment sales. Even without 3G, growing demand in China for existing 2G (second-generation) services present a significant business opportunity for equipment providers, Leung said.

"They are still growing very quickly, five million new subscribers every month," Leung said. "Whether it's 3G or just plain 2G, they will continue to invest in their networks."

At the end of January, China had 398.8 million mobile phone subscribers, according to MII statistics.