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China Won't Auction Its 3G Licenses
When dealing with the issuance of China's third generation (3G) mobile phone licenses for business, Wu Jichuan, minister of Information Industry has firmly expressed his disapproval of the 3G auction. He said that the auction may lead to price racing or bubble effect, meanwhile, it may make those companies successful in the bidding unable to calculate on the year-term of return.
According to Hong Kong media, in an interview with the Financial Times Wu said that he was against the idea of auctioning the 3G.
China hasn't so far made clear the particular number of the 3G licenses to be issued. However, telecom companies in China are not in great numbers, and they are only few such as China Telecom, China Mobile, China Unicom, and China Netcom and China Jitong as well. Among them only China Mobile and China Unicom have the licenses for cellular phones. China Telecom and China Netcom have expressed their wishes to apply for the 3G licenses. Zhang Chunjiang, vice minister of the State Information Industry said earlier that China is expected to issue the licenses by the end of this year with the number limited to two to three.
Li Ka-Shing, chairman of Hutchison Whampoa suggested that the Chinese government open the issuance of the third generation licenses.
On the issues of common concern on whether "China will set a high barrier to prevent foreign companies from entering into China's Telecom market with an annual turnover to reach 10 billion US dollars and then they will be qualified to play a part in China's fixed telephone network and mobile phone business", Wu's answer was in the negative, saying no such policies would be introduced. He stressed that foreign companies would not be judged by their turnovers, but by their investment commitment.
Earlier outside media revealed that the upcoming issued Telecom regulations stipulate that China will set a higher threshold for foreign companies to enter into China's fixed telephone network and mobile phone market, on the contrary, policies on opening China's Internet will be comparatively unrestrained.
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