China's mobile phone industry has become a battleground between service providers and technology firms

Major tech companies in China are locking horns in the battle to dominate the country's mobile phone market

The Chinese high street is the setting for a fight for control of the country's telecommunications sector, involving China Mobile, China Telecom and China Unicom.
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As they battle for supremacy in the mobile phone industry, two of China's most powerful technology firms are set to square up against each other in court.
Huawei, which has secured a series of contracts with overseas telecommunications operators, began legal action in Europe against rival ZTE over alleged infringement of intellectual copyright regarding mobile broadband data cards.
Not to be outdone, ZTE counter-sued, this time in China, demanding compensation and warning it would also take action outside the country.
Away from the courts, the Chinese high street is the setting for an equally fierce fight for control involving the country's three main mobile phone service providers, China Mobile, China Telecom and China Unicom.
These three have locked horns as they compete to become the dragon economy's leading provider of 3G services, and are spending heavily on subsidies for handsets to attract customers.
Although 3G has yet to excite the public, the basic mobile phone is nonetheless becoming even more popular in the country.
In March, figures showed an extra 19.8 million mobile phone subscriptions were added, taking the total to 878.8 million.
Even China's modestly paid migrant and rural workers are getting on board the mobile bandwagon, although revenues per user are suffering because they are subscribing. Against this backdrop, the number of fixed-line subscriptions is falling fast as people turn to mobiles.
China's 3G story dates back to 2009, when the ministry of industry and information technology assigned licences to the country's three operators. By the end of that year, there were only about 7 million subscriptions, just 1 per cent of mobile users at the time.
Since then, things have picked up, but the feeling remains that 3G has not caught on as hoped. Among the three operators, none has developed such a dominant position that it can be described as having won the race.
In China, each operator uses a different technology platform.
Third place is occupied, at least for the moment, by China Telecom, which offers services based on CDMA2000 technology that originated in the US. In March, China Telecom added 1.61 million 3G subscribers, bringing its total to 16.4 million.
China Unicom, which uses W-CDMA technology derived from Europe, is just holding on to second place. At the end of March it had 18.5 million 3G subscribers, after securing an extra 1.08 million that month.
China's current 3G leader is China Mobile, which had 27 million users signed up to the domestically developed TD-SCDMA platform at the end of March, with the company having recorded 2.45 million new subscribers in a month.
These figures give China 61.9 million 3G users, which works out at a less-than-impressive 7 per cent of the total mobile population.
For comparison, even three years ago the UK, for example, had 10.8 million 3G subscribers, which at the time was 15 per cent of the total subscriber base, while averaged across Europe the figure was about 11 per cent.
According to Lei Shi, a telecommunications specialist based in Beijing at the consultancy BDA, 3G "has not taken off" in China.
While 3G network problems have by no means been unique to China, Mr Shi believes they remain a reason why take-up has been modest. Even in the central business district of China's biggest cities, he says, coverage can be patchy. "3G network coverage is not good," he says.
The lack of availability in China of attractive 3G handsets from top international manufacturers has also held back the expansion of the technology, Mr Shi believes. However, no one could accuse the operators of being half-hearted in their attempts to attract 3G customers, who generate more revenue users with more basic mobiles.
In the first quarter of this year, China Unicom reported profits dropped by 166 million yuan (Dh93.8m), down 86 per cent from the same period last year, with analysts attributing the decrease to subsidies on 3G handsets.
The modest achievements of 3G in China raise questions about what the reception will be like for 4G technology, which allows data to be transmitted at much higher rates.
According to state media reports, the information technology ministry has given permission for China Mobile to begin 4G trials, although these are not scheduled to begin for more than a year.
"In China the mass market is still 2G and all the three Chinese operators have invested a lot of money in deploying 3G networks," Mr Shi says.
"It will take them three to five years to get a profit from 3G, so for 4G I don't think they will have an aggressive attitude to deploy this technology in China, except China Mobile."
China Mobile is more enthusiastic, he suggests, because its 3G technology is less mature than that of its two main rivals, making it keen to move on to 4G.
"In 2G, China Mobile is the distinct leader, but in 3G it has seen China Telecom and China Unicom catch up. So China Mobile wants to use 4G to get back their advantage in the market," Mr Shi says.
"For 4G … they have to rebuild their network. For this, China Mobile has an advantage because they have much more cash, but it's hard to say they will be successful. The 4G market will take off in three to five years at least in China."