Stocks climb on "misinterpreted" 3G report

Shares in local telecom firms jumped yesterday on a report the State Council had approved a plan to launch 3G services, which analysts and officials said could be a misinterpretation.

China Unicom, the nation's second largest mobile carrier, closed at 12.29 yuan in Shanghai yesterday, up 8.82 percent. ZTE Corp, the nation's second biggest phone-equipment maker, gained 4.39 yuan, or 7.4 percent, to 63.69 yuan.

The rise is seen as a response to an earlier Xinhua News Agency report that the State Council had approved the proposal to start "preparation for the next-generation broadband wireless mobile communications technology". The article triggered speculation that China would begin its launch of the long-awaited 3G mobile services.

"It's a misinterpretation," said Wang Lijian, division chief of the Ministry of Information Industry's news department. "The technology mentioned by the State Council has no direct link with 3G services and won't affect the progress of its commercial deployment." Wang didn't give a timetable for the launch of 3G services.

According to Wang, "broadband wireless mobile communications technology" was first raised in 2006 as a research project for the nation's long-term science and technology development. The technology is expected to have a transmission capacity of 50 to 100 times the current 3G technologies.

The high-speed 3G technology allows users to hold videoconferences and offers faster Internet downloads.

The government is trying to boost the development of its homegrown 3G standard TD-SCDMA, which is being tested in 10 cities. Rival standards WCDMA and CDMA2000 are already in use in other countries.

China Mobile Communications, which owns 74 percent of Hong Kong-listed China Mobile Ltd, is now building its TD-SCDMA network in eight cities, including Beijing and Guangzhou. The parent companies of fixed-line operators China Telecom Corp and China Netcom Group Corp are also building TD-SCDMA networks.

The TD-SCDMA network in the 10 cities will serve 50 million customers, Wang Jing, TD-SCDMA Forum secretary-general, said earlier.

The 3G mobile-phone network might be introduced for commercial tests by users at the end of the first quarter of 2008, Wang was quoted as saying.