Chinese telecom investment wanes

Fixed line subscriptions are expected to fall this year

Investment in China's burgeoning telecoms market fell by 20% last year, the government has reported.

China's mobile market has enormous potential for growth, and has been a bright spot for telecoms firms during a wider slump.

But a slowdown in growth is inevitable, causing companies to adopt the more cautious stance towards investment.

The spending cutbacks are bad news for network equipment makers such as Motorola and Alcaltel.

Despite the anticipated slowdown, telecoms firms in China reported a 14% jump in overall revenues last year

3G hopes?

Wu Jichuan, Minister of Information Industry, forecast that the number of mobile users would increase by 52 million users in 2003.

That is a sharp drop in growth from the previous year.

Fixed-line phone subscriptions are also likely to edge lower, the minister forecast.

Spending on equipment is expected to recover when carriers begin upgrading their networks to carry the next generation of mobile phones, known as 3G.

But Mr Wu did not give any indication of when the government might issue its long-awaited licences for 3G phone services.