October 21, 2008: A model displays a 3G-capable mobile phone at the P&T/Expo Comm China 2008, at the new China International Exhibition Center, Beijing. Xinhua

A telecom college’s advertising draws attention at a job fair in Beijing. CFP Watching a TV broadcast via a 3G-capable mobile phone. by Duan Wei

On December 31, 2008, during a regular meeting of the State Council chaired by Chinese premier Wen Jiabao, the issuance of the so-called Third Generation (3G) mobile phone licenses was approved, officially concluding eight years of deliberation and effort to establish 3G standards.

On January 7, 2009, the Ministry of Industry and Information Technology (MIIT) issued three 3G licenses to three mobile operators. The nation’s largest, China Mobile, was awarded a license for TD-SCDMA, the domestically-developed 3G standard. The other two main carriers, China Telecom and China Unicom, received licenses for CDMA2000 and WCDMA, respectively. The move to 3G services made available the technology to all Chinese cell phone users beginning in 2009.

3G Cells

3G, the third generation of digital telecom technology, offers a wide range of state-of-the-art services, including broadband wireless Internet access and mobile television.

The first generation of digital mobile phones, introduced in 1995, was limited to only voice transmission. The second generation, based on GSM networks, offered services such as Short Message Service (SMS) and email. Compared with predecessor technology, 3G networks provide higher data rates and a full range of multimedia applications, including Internet access, telephone conferencing and e-commerce facilitation.

Thus, a 3G-capable cell phone is something far beyond a device for voice communication. “The application of 3G networks marks a technological revolution,” said Professor Wang Jing with the Information Technology Institute of Tsinghua University. “Besides an enhanced subscriber capacity, 3G networks also offer bandwidth and a transmission rate far beyond what was previously available.” 3G networks can provide a transmission rate as much as 40 times that of GSM networks, thus eliminating bottlenecks in transmitting multimedia data like images, music and videos.

For users, 3G cell phones are mobile handsets integrating such services as video calls, mobile television, music downloading, online games, GPS navigation, online shopping and mobile payment.

Notably, 3G cell phones offer greater capacity for entertainment. For instance, they combine the functions of MP3 and MP4 players, and serve as mobile game consoles. According to industry experts, they offer an enhanced experience beyond ordinary game consoles, due to the capacity of Internet access almost anytime and anywhere.

3G cell phones can also be used as online banking interfaces. The mobile operators can link cell phone numbers with subscriber bank accounts, if so optioned by the user, enabling bill payment via their 3G phone.

3G Development

China invested hundreds of millions of yuan in the construction of its 1G and 2G networks. But because Chinese enterprises did not control the core technologies, their foreign counterparts more benefitted from the investment. Thus, with the support of the Chinese government, domestic scientists developed the nation’s own 3G standard. In May 2000, the International Telecommunication Union (ITU) identified three mainstream 3G standards: TD-SCDMA developed by China, WCDMA developed by Europe and CDMA2000 developed by the United States. The TD-SCDMA is China’s first internationally-recognized standard in the field of telecommunications.

Thereafter, China repeatedly attempted to promote the commercial use of 3G mobile business. Due to technological bottlenecks and a shortage of funding, however, those attempts resulted in insubstantial progress. Rumors along the lines of “China to issue 3G licenses” and “3G embraces ice-breaking year” were circulated at the start of each year since 2000. However, all such claims were proven to be erroneous. Even so, both mobile operators and users still had faith that the 3G era would one day arrive.

In the meantime, domestic telecom operators launched PHS-based telephony service and CDMA service based on the so-called 2.5G network.

3G Olympics

On December 12, 2000, with Beijing’s bid for hosting the 2008 Olympics, the Chinese government signed a document pledging that China would offer 3G facilities and services during the 2008 Olympics.

To fulfill the pledge, in host and co-host cities prior to the Games, China Mobile launched a large-scale trial on its TD-SCDMA system, developed 52,000 3G mobile subscribers and completed the construction of 3G networks, which played an important role in communications during the Games.

Yang Yichun, director of the Technology Department of Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG), said that on the night the Beijing Olympics opened, nearly 7,000 subscribers used the TD-SCDMA network and completed more than 800 video calls.

From 2007 to 2008, the application of 3G expanded around the world. To date, more than 100 countries and regions have deployed 3G networks. Reportedly, Japan now has 100 million 3G subscribers, and the number in the United States is 64.2 million.

3G Gain

Despite the worldwide financial crisis, China officially moved ahead with 3G development. Dual ancillary goals are to optimize the competitive structure of the nation’s telecom market and stimulate domestic consumption.

3G requires a thorough modification of current telecom networks, and users must acquire 3G-capable cell phones — a tremendous market consideration.

At the close of 2008, Li Yizhong, minister of MIIT, said that the issuance of 3G licenses would stimulate investments of 200 to 300 billion yuan. Subsequently, China’s three major mobile operators announced their own investment plans, pursuant to which China Telecom will invest 80 billion yuan, China Mobile will invest 20 to 30 billion yuan, and China Unicom will invest 40 to 50 billion yuan.

Chen Jinqiao, deputy chief engineer of the MIIT’s Telecommunication Research Institute, is more optimistic about the role of 3G construction in stimulating domestic consumption. It is expected that China will have 500 million 3G users in five years, forming an industrial chain integrating 3G network construction, terminal equipment manufacturing, telecom operation and information services. It is estimated that the industrial chain will stimulate social investments ranging from 1.8 to 2 trillion yuan.