The consulting firm Frost & Sullivan said in a report that the huge investment in 3G network construction made by China's three telecom operators, China Mobile (00941.HK; CHL.NYSE), China Unicom (00762.HK; CHU.NYSE) and China Telecom (00728.HK; CHA.NYSE), has led to the robust development of China's 3G equipment market. China's Huawei Technologies (Huawei) acquired the biggest market share.

The three carriers have procured 48 billion yuan of 3G equipment since 2008. Included were 20.5 billion yuan from China Mobile for TD-SCDMA (TD) network access equipment of the first three phases; 17 billion yuan from China Unicom for buying WCDMA network access equipment; and 10.5 billion yuan from China Telecom for CDMA2000 EV-DO equipment.

By the end of 2009, China Mobile had built 108,000 TD base stations covering 238 cities; China Unicom had constructed 110,000 base stations covering 335 cities; and China Telecom had established 114,800 base stations.

The telecom operators' heavy investment has considerably benefited 3G equipment over the past year. China Mobile conducted centralized procurement on three occasions from 2007, with ZTE and Huawei respectively obtaining 34 percent and 31 percent market shares. China Unicom's deployment of WCDMA network was divided into two stages, and Huawei's market share ranked number one. China Telecom also made two centralized procurements in 2008 and 2009, and Huawei acquired a 41.6 percent share.

Frost & Sullivan holds that Huawei has generally grabbed the largest 3G-equipment market share, building on its technology and research investment, financial strength, the quality of its products, and marketing performance.

In the next two years, the carriers will not be investing in any further large-scale 3G network construction, and their major requirements could be network capacity expansion and equipment relocation. Therefore, equipment manufacturers are expected to put the emphasis on maintaining existing market share.

Source:Xinhua