| China Cancels its Mobile Handset Production Licenses |
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| Monday, 05 November 2007 | |
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China has announced the cancellation of the cell phone handset production licenses, but the products will be required to pass tests prior to its introduction in the market.
In order to manufacture mobile phones, it was required to obtain the production licenses from MII (Ministry of Information Industry) earlier in China. During 1998-2005, MII issued around 50 production licenses for mobile phones to almost 40 companies, including 19 CDMA and 30 GSM licenses. In 2005, the system was reformed after which many manufacturers started production of cell phones. The mobile phone industry in the country is developing at a fast pace since China currently produces around 50% of the cell phones of the world. During the first six months of 2007, China shipped over 253.8 Million units, 25.6% higher from the same period in 2006. The global shipment was approximately 264 Million units in Q2 of 2007 where China’s total share is estimated at around 50% during the same period. Cellular-news published this news. China’s mobile producers adopted a number of technologies and this resulted in the growth of its cell phone industry. Currently, the country is focusing on developing the 3G cell phone technology. The government of China is also distributing licenses for the 3G mobiles to a number of domestic and foreign manufacturers. As per the industry experts, procuring production license is not main thing for the manufacturers, but to get MII’s certification for network entry, the products are required to pass some necessary tests before it is made available in the market. Therefore, by terminating such licenses, the number of enterprises participating in the industry could increase, and also lower the prices. A research analyst at RNCOS said, “The mobile industry in China is the fastest growing industry in the world and is crucial to the growth of the economy of the country. That is why the government is looking after the sector. But the cancellation of the licenses is anticipated to impact the GSM handsets only (and not over the CDMA mobile handsets), so that only the 3G cell phones’ handsets can be controlled by the government. This is a big issue in the country’s mobile industry”.
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