4G indicates stronger economic growth for China

BEIJING - The issuance of fourth-generation (4G) licenses, which marks a new era in China's high-speed mobile network, is expected to boost the country's economic growth along with an increase in information consumption demand.

The 4G age will bring about more types of business and services to the country, which has the biggest number of Internet users in the world, the China Securities Journal said on Thursday.

China Mobile, China Telecom and China Unicom will offer 4G mobile network services nationwide. The country's Ministry of Industry and Information Technology (MIIT) issued 4G licenses to the three operators on Wednesday.

For the three operators, the 4G license means both chance and challenge. Different operators are again standing at the same starting point, making preparations for intense competition.

Meanwhile, users will shuffle around on the new platform that requires support of new technology and system reconstruction.

The 4G platform will bring more application programs and provide better services for consumers. With faster Internet speed and cheaper price, a refined user experience is to be expected, MIIT experts said.

According to MIIT, China's WeChatters and microbloggers reached 400 million and 500 million respectively in July. Latest data showed China has 604 million Internet users, among whom 464 million are on mobile phones.

Nowadays mobile phones have displaced PC's as the largest Internet terminal. Any change related with mobile phones will impact individuals and the way people communicate.

The need for information services always pulls the demand for mobile communication products. 4G services are based on 4G phones. Users must change their current 2G or 3G phones to a 4G one in order to enjoy 4G services, which may lead to a surge in purchases next year.

A recent MIIT report predicted that the sales volume of smart devices including smart phones and tablets will exceed 2 trillion yuan ($326 billion) in the coming three years.

"For Asians, except for their 8-hour sleep time, the other 16 hours of the day are closely linked with mobile Internet. This means they are asking for more types of applications, and this will bring more market opportunities," said Yu Yongfu, CEO of UCWeb Inc.

There is a reason for the optimism.

The 3G network directly contributed 211 billion yuan to China's GDP growth and added 1.23 million jobs during the first three years after it was put into use in 2009, according to the MIIT.

The issuance of 4G licenses is expected to provide investment and job opportunities, fueling economic growth even better than in the case of 3G.

Industry insiders predicted that the construction of 4G networks will bring investment of about 500 billion yuan in the early stages.

Other industries also see potential. The Industrial and Commercial Bank of China said on Wednesday that it would offer self-service banking running on 4G networks together with China Mobile Ltd.

Joining business are government agencies. A quarter of government ministries and 31 percent of provincial-level governments have developed software applications that run on smartphones or other mobile devices, according to figures released last month by the China Software Testing Center (CSTC), operated under the MIIT.

It is not possible, however, for 4G phones to displace 3G phones at once. In the near future it will coexist with 3G and even 2G phones as it takes time to change consumer habits, said MIIT analysts.