China 3G hit by further delays

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It is still believed possible that 3G licences could be granted this year. However, by delaying the full rollout to 2008, observers believe that the government can buy more time to sort out these internal struggles for influence.

Such a move would also give TD-SCDMA operators a chance to iron out any remaining bugs, thereby reducing the risk of negative publicity from major glitches during a high-pressure competitive launch of the untried technology.

An alternative strategy involving the issue of TD-SCDMA licences first, giving the new technology a more gentle start, is untenable, according to one government advisor.

"It is not possible for the Chinese government to issue the TD-SCDMA network licence on its own, and it is also impossible to issue the TD-SCDMA licence before the others," said Professor Tingjie Lü of the Beijing University of Posts and Telecommunications.

"The 3G network licences must be issued together. Our leaders have already promised this to the outside world. We must issue 3G licences according to that promise. We must follow the international game rules."

Professor Lü is a member of the Ministry of Information Industry consulting committee on telecoms economics.

The US government has complained repeatedly that China is meddling in the 3G market, despite promising not to.

The Chinese government is expected to reach a decision on its 3G licensing schedule by the start of the Chinese lunar new year holiday which falls in mid-February.