CHINA is expected to invest at least four billion yuan (US$519 million) to procure home-grown 3G phones around October, a prelude to issuing the long-awaited 3G licenses, industry sources said yesterday.
China Mobile, which has paid six to seven billion yuan to purchase 3G network equipment in 10 cities nationwide, will buy two million TD-SCDMA (time division-synchronous code division multiple access) phones in October, according to Chen Haofei, the secretary general of TD-SCDMA Forum.
About 18 phone makers will share the TD-SCDMA phone pie, including ZTE Corp, Datang Mobile, Samsung, LG, Haier, Lenovo Mobile, TCL and Huawei Technologies.
"The first-tier suppliers, about six or seven vendors, will take 60 percent of the total phone procurement value," Chen told Shanghai Daily during a phone interview yesterday, without naming the companies.
ZTE, Datang, Samsung, LG, Motorola are in the first-tier list, industry insiders said.
China promised to provide next-generation mobile phone, or 3G, services during the Beijing Olympic Games in 2008. China Mobile, the country's No. 1 mobile carrier, is constructing TD-SCDMA networks in the cities like Shanghai, Beijing and Shenzhen.
It is also testing the network among so-called "friendly users" on a small scale, often several thousand users in each city.
China will probably issue a TD-SCDMA license first to support the home-grown industry and then issue licenses based on other technologies, including CDMA 2000 and WCDMA (wideband-CDMA). Each TD-SCDMA phone for testing costs 2,500 yuan (US$324).
In the third quarter, the TD-SCDMA phone for commercial users will cost 2,000 to 3,000 yuan but they are expected to feature stronger functions compared with the test models now, Chen said.
The TD-SCDMA phone cost will sharply come down after mass production, ZTE said yesterday. At present, ZTE's phone production capacity has surpassed 20 million annually.
In the first quarter, China's TD-SCDMA equipment market revenue was seven billion yuan, dominated by ZTE, Datang and TD-Tech, a joint venture between Siemens and Huawei, according to a Beijing-based research firm Analysys International.