China telecom service providers shift to focus on PHS and CDMA 2G services

With the China government withholding from issuing 3G licenses, some China-based telecom service providers, including China Telecom and China Unicom, are pushing sales of handsets and services supporting PHS and CDMA 2G standards as alternatives, according to industry sources in Taiwan.

While preparing to offer TD-SCDMA testing services in only eight designated cities during the Beijing 2008 Olympics, the China government is now unlikely to issue 3G licenses until 2009, speculated the industry sources.

In order to continue to move their operations forward, China Telecom and China Unicom have maneuvered into services supporting PHS and CDMA 2G technologies, including S-CDMA and CDMA 450, the sources noted.

The new focus has helped slow down the declining pace in demand for PHS handsets, while pushing up demand for GSM/CDMA, GSM/PHS and CDMA/PHS dual-mode handsets, indicated the sources.

Taiwan's ODM CDMA handset makers, including Compal Communications and Foxconn International Holdings (FIH), and those who have ventured into China's CDMA handset market such as Inventec Appliances and Foxlink, are likely to benefit from the shift in focus, stated the sources.

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