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3G is here, finally

(China Daily)
Updated: 2009-01-08 07:39

So the third-generation (3G) mobile phone licenses have finally been issued. But 3G is not only about bringing forth lucrative businesses for mobile operators and massive telecom investment to boost economic growth.

By issuing the long-waited 3G licenses, the Ministry of Industry and Information Technology (MIIT) may have kick-started a new race among the three domestic telecom giants to better serve consumers.

The issuance of 3G licenses to China Mobile, China Telecom and China Unicom Wednesday officially ushered in a new phase in the development of China's telecom industry.

Related readings:  Unraveling the telecom puzzle  China's telecoms sector gets 3G licenses  China Mobile falls after 3G licence issue

Domestic mobile phone users numbered more than 600 million, and the business volume reached about 2 trillion yuan ($292 billion) for telecom service in 2008. That is evidence enough that the potential of China's 3G market is just as huge as the telecom giants can imagine. The faster, fancier and more convenient service the 3G telecommunication promises will surely enable them to make handsome profits out of the world's biggest - and still growing - population of mobile phone users.

The construction of 3G high-speed networks entails a multi-billion-dollar investment boom. For the government this is more than welcome at a time when policymakers are struggling to fight off a global recession. It is expected that investment in such 3G networks will total 280 billion yuan over the next two years.

Some people once complained that policymakers had dragged their feet for too long over the adoption of three competitive 3G standards to upgrade China's telecom service. Yet if the delayed introduction of 3G mobile phone can now give a shot in the government's arm to revive economic growth, it only proves it pays to be patient.

However, to make the fast-growing telecom industry a turbocharged growth engine for the economy, policymakers must do more to promote fair competition in the telecom market.

The technological advancement of 3G telecommunications will allow much more service firms to tap into it creatively to meet the diversified and expanding demand of Chinese consumers. And such a boom in the service sector will also benefit the economy which hopes to rely less on energy-consuming and resource-intensive industrial production for growth.

The three telecom operators should not be allowed to abuse their power to prevent consumer-oriented innovation and competition. While granting 3G licenses, the MIIT also issued regulations detailing requirements for 3G network operation in areas such as market competition and consumer rights. Such regulations should be strictly implemented under public scrutiny.