Jane Chen/ Shanghai Daily news

With China's long-awaited 3G telecommunications licenses expected to be issued next year, two key telecom operators are rushing to arrange strategic phone supply partnerships, the Beijing Morning Post said.
Quoting insider sources, the newspaper said China Telecom, the sole landline telecom operator in southern China, has supply agreements with five phone makers for the 3G phones, including Motorola, Nokia, NEC, Sony Eriksson and Huawei. Phones on large purchase orders are under 1,000 yuan (US$121) each.
Huawei, the only domestic telecom equipment maker among the five, has attracted industry attention because it has not yet produced phones.  But according to its plan, China's largest telecom supplier will expand its product lines to include telecom terminals and will begin producing mobile phone products as of 2005.
"The supplier list was settled in early August," the Beijing Morning Post report said yesterday, quoting a source close to the deal. Under the agreement, suppliers will begin providing 3G phones as soon as  China Telecom obtains a 3G license.
China Telecom set up a 3G task group in February. Since then some ten group members have begun strategic supplier negotiations with the five phone makers.
Meanwhile, China Netcom Corp., the only fixed-line telecom service provider in northern China, is preparing its strategic supplier talks.  After successful overseas share offerings in Hong Kong and New York, the company has been revving up its 3G deployment since mid November, according to the Beijing Morning Post report.
CNC's phone supplier team, including Motorola, Nokia, NEC, Siemens, Huawei and ZTE, will be larger than China Telecom's.
CNC has signed a supply memorandum with the phone makers, but as yet no more specific progress has been made, according to the report.  Like China Telecom, it is still waiting for a 3G license.
China Telecom and CNC are presently busy with the testing stages, and will probably start building nationwide 3G networks as early as next year, an investment that could be hundreds of millions yuan, the Beijing Morning Post said.