China says $41 billion to be spent on 3G

BEIJING (Reuters) - Chinese telecom operators will spend about $41 billion on next generation (3G) mobile networks over the next two years, the government said on Friday.

In addition, China will support the development of core microchips, terminals and testing equipment as it expands network coverage, Minister of Industry and Information Technology Li Yizhong was quoted on the ministry's website as saying.

Li said last week that at least $29.2 billion would be spent on 3G next year alone, while long-awaited licenses would be awarded by early next year.

Beijing is developing its own TD-SCDMA 3G standard to promote domestic industries and technology and to avoid the hefty royalties demanded by foreign companies that own the rights to the technologies that are commonly used around the world, WCDMA and CDMA 2000.

China Mobile (0941.HK) will get a license for TD-SCDMA, Li said last week.

In addition, China Unicom (0762.HK) will operate a WCDMA network, while China Telecom (0728.HK) will get a license for CDMA 2000 technology.

The new technology handles faster data downloads, allowing cell phone users to make video calls and watch TV programs.

(Reporting by Kirby Chien; Editing by Nick Macfie)