The Ministry of Information Industry told a China Telecom annual working conference in Beijing on December 19 that four criteria have to be considered when releasing 3G licenses, China News Service reported on Monday.

Vice Minister Xi Guohua said they were: technical and business maturity, optimizing telecom competition, intellectual property right (IPR) fees and China's own standard TD-SCDMA.

"3G telecommunication technology is basically mature by now," said Xi.

With the TD-SCDMA standard, he said several rounds of field tests have been conducted and a few key technologies verified, and 3G terminal equipment production costs are only 20 percent higher than 2G, while 3G voice system production costs are 50 to 60 percent lower.

"The introduction of 3G technology is a good opportunity to optimize the structure of China's telecom sector, so we must ensure an effective competitive situation and prevent building redundant projects," he said.

Current 2G equipment adopted by Chinese telecom operators is all foreign-made. ZTE and Huawei Technologies have made innovations in some products, but they still have to pay high IPR fees to the people who came up with original ideas behind new products.

Currently, IPR fees paid to foreign firms account for 15 to 20 percent of total sales revenue.

Xi said IPR fees should be "reasonable," warning that a monopoly might take shape and new technology dampened if they are too high. He said they should also be determined before 3G licenses are granted.

China needs not only its own standard, but also patented technologies, he said, and breakthroughs have been made in TD-SCDMA related products, industrial clustering and industrial chains.

TD-SCDMA is expected to win a seat in the future 3G market, Xi said.

(China.org.cn by Tang Fuchun, December 21, 2005)