A round of restructuring is likely to sweep China's telecom industry as a result of the development of mobile technology and the introduction of new telecom services, a leading official said yesterday.
Wang Yiming, vice-president of the National Development and Reform Commission's Macroeconomics Research Institute, said that the nation's booming economy, high levels of investment in the telecom industry, and the advent of third generation (3G) wireless communications presented the sector with great opportunities.

Wang made the remarks yesterday at the 2005 China Mobile Telecommunications Industry Summit Forum in Beijing.

Some analysts believe Wang's remarks are an indication of China's wish to reshuffle its telecom market before releasing 3G licences.

A possible splitting up of China Unicom, the country's only mobile telecom operator running both GSM (global system for mobile communications) and CDMA (code division multiple access) networks, has been the subject of intense media speculation since the start of the year.

Reports pointed to the likelihood of China Unicom selling its GSM network to China Telecom, and hiving off its CDMA network to China Netcom. But this was strongly denied by China Unicom Board Chairman Chang Xiaobing at last week's release of the firm's 2004 results.

But he admitted that a reshuffle of telecom operators would benefit China's telecom industry, adding that China Unicom is actively seeking co-operation both at home and abroad.

China Unicom is sure to secure at least one 3G licence, according to Chang.

There is a general consensus that the Chinese Government will release its 3G licences no later than the end of this year.

Information Industry Minister Wang Xudong stated in January that his ministry is to make suggestions for the development of 3G to allow a decision to be made this year.

"We are going to develop 3G at an appropriate time in 2005," Wen Ku, director-general of the Science and Technology Department under the ministry, told the forum.

"We would like to learn from the global experience on 3G development to improve 3G development in China," he said.

It has been reported that the Chinese Government is likely to issue three 3G licences - one for each 3G standard.

The three standards are the European-based WCDMA (Wideband code division multiple access), US Qualcomm-based CDMA 2000 and the homegrown TD-SCDMA (Time Division Synchronous Code Division Multiple Access).

Wen emphasized yesterday that the TD-SCDMA system is developing very well. The standard is expected to be commercially released in June.

Shu Huaying, a professor at the Beijing University of Post and Telecommunications, believed the timing of the issuing of the 3G licences and how many licences will be issued are currently the major concerns of the Chinese Government as all the 3G technologies and market are almost ready.

Figures from the ministry showed that China has recruited more 334 million mobile subscribers by the end of January.