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 cellphones. 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. 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. The government's Saturday statement gave no time frame for implementation and did not specify whether the restructuring would involve the state-owned companies or their listed units. The move is also expected to foster competition in China's mobile sector, where the parent of China Mobile, the world's largest mobile service provider by subscribers, has long overshadowed Unicom, the smaller of China's mobile duopoly and hobbled by a split between two different networks: CDMA and GSM. The move aims to address China Mobile's dominance and Unicom can finally focus on developing a single network, to boost efficiency.
