A multi-billion dollar business bonanza is in prospect for mobile phone network suppliers following the award of next generation 3G mobile phone operator licences in China.

Licences have been awarded to three operators - China Mobile, China Unicom and China Telecom.

Although there is no definite launch date for commercial 3G services in China, the Chinese industry ministry has estimated that carriers could spend as much as 280bn yuan ($41bn) on infrastructure equipment.

As expected China will adopt a multi-standard approach to 3G services with the Chinese-developed standard, TD-SCDMA assigned to one operator and the WCDMA and CDMA-2000 standards, which used in Europe and the US respectively, assigned to each of the other Chinese licensees.

Despite obvious competition from local supplier Huawei, this could be good news for western infrastructure suppliers, such as Motorola, Alcatel-Lucent, Nokia-Siemens Networks and Ericsson, which are seeing demand for networks decline in more mature mobile markets. 

Mobile networks in the US and Europe are running at well below capacity and so the need for investment in new infrastructure by operators will not exist in the near term.

The big beneficiary is likely to be Shenzhen-based supplier Huawei, which has been expanding its business outside China and has risen to become the third largest supplier of mobile networks in just a few years.

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