China’s Operators Prep Next 3G Wave

China's 3G rollout machine is pumping on all cylinders, according to the latest reports from local media and analysts.

With some urban 3G networks already up and running, China Mobile Ltd. (NYSE: CHL) is reported to have initiated a mobile infrastructure tender process for the third round of its TD-SCDMA rollout.

Meanwhile, China Telecom Corp. Ltd. (NYSE: CHA), which received a CDMA 2000 3G license in January, has begun trial 3G services in Shanghai. (See China Awards 3G Licenses.)

The latest China Mobile tender is for 39,000 base stations with TD-SCDMA systems that will provide coverage for 200 cities, about 50 percent bigger than the second-round tender, according to this ChinaTechNews report. (See China Mobile Preps 3G Surge.)

The vendors' role call is expected to match that of the second-round tender. According to a recent Pyramid Research report, "Capex in Asia-Pacific," Datang Telecom Technology Co. Ltd. was the biggest winner of China Mobile's phase two tender, with a 40 percent share of the spoils, followed by ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), Huawei Technologies Co. Ltd. , Nokia Siemens Networks , Potevio Co. Ltd. , and Ericsson AB (Nasdaq: ERIC).

ChinaTechNews also suggests that Guangzhou New Postcom Equipment Co. and FiberHome Technologies Group , which use Datang's equipment, may also join the tender this time.

China Telecom is also set for a rapid rollout of its 3G services. An amendment to its articles of association that allowed for the inclusion of its CDMA 2000 3G business was agreed upon at an Extraordinary General Meeting held on March 12.

Since then, Telecom has launched trial 3G services in Shanghai and the nearby Jiangsu province, according to the China Daily newspaper.

China Telecom, which now runs the CDMA network previously operated by China Unicom, plans to expand its 3G network to more than 100 Chinese cities by the end of this month and all urban regions by mid-May, according to the report.

In China’s recent major telecom service provider restructuring process, China Telecom took over the CDMA network previously operated by China Unicom. (See China to Get 3G – At Last!.)

Now China Telecom has its work cut out just to get its CDMA subscriber base back to its former glory: Unicom had 41.7 million CDMA customers at the end of September 2008 before the hand-over to Telecom, but by the end of the year that subscriber base had shrunk to 27.9 million.

Now that customer number is growing again: China Telecom added just over 1 million CDMA customers in January 2009 to take its subscriber base to 28.9 million.

— Catherine Haslam, Asia Editor, Light Reading