The launch of the third-generation (3G) mobile communications system in China cannot afford another delay, but it must be done with caution, suggests a leading market research house.

Helen Wang, telecommunications research manager with the US-headquartered market research firm International Data Corp's Chinese branch, says she believes China cannot delay releasing 3G licences.

The launch of 3G in the world's largest telecoms market in terms of subscribers has been a hot topic since 2001, but China has postponed granting licenses to operators, which has been speculated to happen this year.

The latest speculation on the date of 3G licence release is around the middle of next year.

IDC's Wang said 3G must be a developed mobile system at the 2008 Olympic Games in Beijing, but it will take at least three years of operation to gather experience and build a complete and efficient network. Therefore, the country needs to start 3G next year, or it will face challenges in providing developed 3G systems to athletes and visitors from around the world at the Games.

Wang said it is important to create market demand, rather than waiting for developed applications.

She said as China has the world's largest mobile communications subscriber population and one of the most advanced telecoms infrastructures, it should use its advantage and become a leader in 3G applications.

If the 3G launch is successful, Chinese telecoms operators, equipment and handset makers, and software developers would have a great chance to spread their experience and products to other parts of the world.

IDC researches show that the deployment of the wideband code division multiple access (WCDMA), a European-dominant 3G standard, has achieved significant growth this year and investment in WCDMA will start to increase significantly beginning next year.

The company predicts WCDMA subscribers will rise to 15 million by the end of this year.

WCDMA is one of the three major 3G standards. The other two are US-led CDMA 2000 and Chinese-initiated time division synchronous CDMA (TD-SCDMA).

IDC said capital spending on the WCDMA systems worldwide was about US$4 billion in 2003, but it will rise to about US$8 billion in 2005 and US$15 billion in 2007.

However, despite the necessity to launch 3G in China, Wang warned operators should not expect quick success in the short term.

She said operators may have to wait for at least three years to make profits from 3G services, so they must control their spending tightly and outsource some services to cut costs.

When telecoms carriers begin to build 3G networks, the networks do not need to have large capacity, but must leave enough room for future expansion.

(China Daily November 22, 2004)