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Starved of bright new sales prospects, the wireless industry has been waiting with bated breath for China finally to make its 3G license awards official and open the floodgates for a multibillion dollar spending spree in 2009-2010. Approval for the licenses came at last on Wednesday, and the country's industry minister said he estimated the three 3G carriers would spend about Yuan280bn ($41bn) on base stations, switches, transmission networks and other infrastructure.

As already known, China Mobile gains the license for the homegrown TD-SCDMA technology, which it has already started to build out around Beijing because of the requirements of the Olympic Games. Meanwhile China Unicom will run W-CDMA and China Telecom CDMA2000. All three have indicated they will migrate to LTE - specifically, the TDD variant largely developed in China - at the 4G stage, a move that Mobile aims to kick off within a year, though it may be thwarted by the slow moving bureaucracy of the Chinese regulators.

While the global equipment vendors jostle for sales, especially against aggressively growing native suppliers Huawei and ZTE, the device makers are also hopeful of a major new market emerging by year end. Although China has a significant number of its own phonemakers, these tend to be at the low end of the scale, and there is growing appetite among the expanding urban middle classes - likely to be the first 3G users - for western brands.

This has led Huawei, in particular, to step up its efforts to become a true smartphone maker, and has lured Nokia early into the Chinese fray. The Finnish giant recently became the first non-Chinese handset manufacturer to show off a TD-SCDMA device, and this week it unveiled its 6208c, a product optimized for pen input of Chinese characters on to a touchscreen. The design of the stylus, attached to the back of the phone, is inspired by bamboo slips and the large color display is designed to resemble an ink stone, traditional in Chinese culture, according to the vendor. The product can support other languages, but is clearly targeted at China, and with its sleek case and array of features - 3.2-megapixel camera, dual LED flash and microSD cards up to 8Gb, for instance - it is the type of product that the 3G operators believe they will start to sell early on their 3G networks. The first release will run W-CDMA but a TD-SCDMA implementation is expected soon.

China's own cellphone industry will need to up its game if it is to compete in the 3G market, but will certainly welcome the new opportunity as it comes under pressure from low end phones from the super-efficient Nokia, and also from Samsung and the Taiwanese vendors. According to the Taiwan-based ITIS project, China's mobile phone sector reached a shipment volume of 175.2m units in the third quarter of 2008, representing 6.2% sequential and 4.3% year-on-year growth, but this was the slowest growth rate for several years. The slowdown in CDMA growth both in China and abroad hit ZTE and Huawei, while high end consumers are, to some extent, waiting for 3G before upgrading.

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