China Mobile increases 3G spending estimate
(China Daily)
Updated: 2004-12-08 10:51

China Mobile (Hong Kong), the world's biggest carrier by subscribers, said yesterday it could spend up to 110 billion yuan (US$13.29 billion) to build a nationwide third-generation (3G) mobile network.

The company, which operates a 2G network in China, estimates a new 3G network would cost 100-110 million yuan with a capacity of 70 million to 80 million users, a spokesman said.

"However, the actual investment required ... would depend on the extent of roaming or handover planned to be made using the company's existing (2G) network in the future," he said.

In August, the company said the cost of a 3G network could be about 60 billion yuan (US$7.2 billion) in the first two to three years, calling the figure a "preliminary rough estimate".

The latest 3G spending plan was the first offered by new Chairman Wang Jianzhou since he recently took the helm of China Mobile under a broader leadership reshuffle at China's top three telephone companies. Wang was previously chairman of China Mobile's top rival, China Unicom.

Wang gave the 3G spending figure at an analyst briefing on Monday.

The company is expected to start building its network shortly after receiving a 3G licence from the government. Market watchers expect that to happen around the middle of next year.

Citigroup analyst Rohit Sobti said the new estimates reduced clarity on the company's spending plans for the technology.

"Contrary to previous management's indicative 60 billion yuan, the new indication is 100-110 billion yuan over three years," he wrote in a note.

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