China will speed up forming related policies on the third generation mobile communication (3G) in 2006, such as technology, operation, fee, regulation and frequency, a senior official said here at a national meeting that closed Wednesday.

China will form a new industry chain and promote the fast and healthy development of 3G, said Wang Xudong, minister of the Chinese Ministry of Information Industry (MII).

It signals that China will roll out 3G in 2006, analysts said.

Wang reiterated that "conditions for China to develop 3G are ready" and advised operators to be fully prepared with network and market development.

Xi Guohua, vice minister of the MII, revealed at an earlier conference that it is time to issue 3G licenses, and the homegrown TD-SCDMA standard should be adopted and run by a strong operator.

China is likely to issue its first 3G license to China Telecom Co., Ltd. in 2006, adopting the homegrown TD-SCDMA standard, according to experts' analysis of the speech made by Xi.

China, which has the world's biggest mobile phone market with 35 million users, has been pushing for development of its 3G standard TD-SCDMA as one of the three international 3G standards. The other two are WCDMA in Europe and CDMA2000 in the United States.

Maturity and intellectual property (IP) negotiations are considered key factors in China's 3G development. Most profits in China's telecom market flow into the overseas giants due to China's lack of patents in the current technology, which is considered the crucial reason for Beijing to push TD-SCDMA.

China's companies have held hundreds of patents in TD-SCDMA, laying a solid background for continuous development, sources said.

Pilot commercial networks would be set up early next year and be ready to take off after a three-month test period.

Insiders predicted China would issue 3G licenses in the second quarter or in the middle of 2006.

The issuing of 3G licenses is expected to contribute a lot to the world system setting industry, the terminal equipment industry, the software and hardware industry and the electronic apparatus and components industry.

Domestic enterprises, including ZTE and Bird, have expanded their investment in 3G and are preparing for large orders from China's telecom operators.

Source: Xinhua