China says to spend $58.5 bln on 3G over 3 years

BEIJING, Jan 22 (Reuters) - China’s three telecom carriers will spend 400 billion yuan ($58.5 billion) over the next three years, building out their third generation (3G) mobile networks, the government said on Thursday.

The announcement comes after the ministry handed out long-delayed 3G licences earlier this month, as China tries to catch up with developed countries in introducing a technology that allows sophisticated multimedia and video services.

China Mobile 0941.HK, the world's largest mobile carrier, will spend 58.8 billion yuan in 2009 to build out its TD-SCDMA network, said the Ministry of Industry and Information Technology.

TD-SCDMA is a technology developed in China and backed by Beijing.

Smaller rivals China Unicom 0762.HK and China Telecom 0728.HK will each spend about 30 billion yuan this year to develop their WCDMA and CDMA 2000 networks, respectively, said the ministry.

China Mobile will build about 60,000 base stations by the end of 2009 when its coverage will serve more than 70 percent of all Chinese cities, it said.

China Unicom said last week that it would launch 3G services in 55 cities in the first half of 2009.

The technologies awarded to China Unicom 600050.SS and China Telecom are widely used around the world and should be easier to deploy and service than TD-SCDMA, say analysts.

Although TD-SCDMA technology that China Mobile gets is domestically developed and heavily backed by the government, it has only gone through test trials and could be more costly and complicated to roll out. [ID:nPEK343905]

China Unicom and China Telecom are expected to grow faster than China Mobile in terms of new users and sales, but China Mobile’s network will still be the best over the next 2-3 years, said ratings agency Fitch Ratings.

$=6.84 yuan Reporting by Kirby Chien; Editing by Ken Wills