China has introduced an indigenous, third-generation (3G) mobile phone service known as TD-SCDMA. 

A number of foreign and domestic vendors are poised to fiercely compete over $41 billion in orders, including Motorola Inc, Alcatel-Lucent SA and Nokia-Siemens Networks.

However, foreign companies are expected to win less than half of China's 3G orders. Leading domestic suppliers such as Huawei Technologies, ZTE and China Mobile will likely snap up the remaining subscribers. 

The launch of China's new 3G service could help bolster the country's slowing mobile phone sales. As IT Examiner previously reported, CDMA shipment volume slipped 7.8 per cent sequentially to 18.9 million units, down 3.4 per cent year-on-year, while CDMA phones' share of the industry's overall shipment fell to 10.8 per cent in the third quarter. In sharp contrast, shipments of GSM (Global System for Mobile communications) hovered at 155.1 million units during the third quarter, up 8.4 per cent sequentially and 6.4 per cent year-on-year.

According to ITIS, Chinese mobile phone shipments reached a volume of 175.2 million units in the third quarter of 2008, representing 6.2 per cent sequential growth and 4.3 per cent year-on-year growth. The industry's rate of expansion peaked in 2006 and has now slowed to mid-single digits.

Eric Chen, an analyst at BNP Paribas, forecasted that Chinese handset makers will ship 200 million phones to emerging markets by the end of this year - accounting for a total share of 18 per cent. In addition, Vodafone is expected to order 35 per cent of its handsets in 2009 from Chinese companies, including ZTE, Huawei, TCL-Alcatel and Foxlink. Other operators, such as India's Spice, are currently eyeing China as a source for handsets. X

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