Abstract__Since the inception of telecom reform in 1994, structural reform has been a main thread
surrounding the course of the development of China’s telecommunications industry. In
structuring the 2008 reform and the 2009 3G rollout China’s government adopted a
relatively balanced approach in the hope of creating level-playing-field in 3G era.
Nevertheless, due to the presence of substantial switching costs, substitution effects
from the present technology mode, that is, 2.5G, the absence of killer applications, among
other technological and institutional factors, China may not have a realistic 3G era before
moving toward 4G and beyond. At the bare minimum, currently there is a lacking of either
adequate technological-push or demand-pull for a full-scale 3G commercialization
—there is no sign that this situation will change in the near term. Triggered by recent initiatives of
market convergence between the telecommunications, Internet, and cable, a renewed
circle of market, and regulatory reform is probably necessary to cast a sounder industry
basis for a timing migration toward the next-generation-networks (NGNs). The timing
migration toward 4G (and beyond) may provide a chance for a late-mover nation like
China to leapfrog its western counterparts in leading the industry in the era of NGNs.
To this end, China is confronted with challenge in re-examining its industry policy as well
as technological strategies for a sustainable development in the era of NGNs. This study
offers heuristic analysis and insights on the above issues based on archival documents and
interviews. While implications are suggested for China’s circumstances, the Chinese
experiences may also be considered by other countries and investors when it comes to 3G
(and beyond) policies, regulations, deployments, and evolutions.