Mr Xi's remarks hinted that China Telecom and China Netcom, the nation's fixed-line players, which are facing falling subscriptions, could also run mobile business.

Mr Xi also said the industry reform would push for the convergence of internet and mobile communications.

The reform would help facilitate the development of the whole third-generation mobile communications industry, he said.

'The technology has become more mature, as we have invested heavily in the past few years,' said Mr Xi. 'To issue 3G licences, we need to take into account the maturity of the technology.'

Beijing may also issue licences for foreign 3G technology, he said, but added that TD-SCDMA technology could be further developed and play an important role in the next phase of mobile communications.

Mr Xi said data business would help sustain strong growth in the mobile industry.

'The mobile sector still has room for further growth, led by short messages, picture messages and mobile TV.'

According to a study by UBS, China Mobile accounted for 54 per cent of sales in the telecommunications service market at the end of last year, followed by China Telecom's 22 per cent. China Unicom and China Netcom accounted for 14 per cent and 10 per cent respectively.

Building a network

January 2006

Ministry of Information Industry announces that TDSCDMA is the country's standard of 3G mobile telecommunications

March 2006

Six months of trials begin in selected cities, but the results are not satisfactory

Janaury 2007

Government instructs China Mobile to build commercial trial networks in eight cities. Fixed line carriers China Telecom and China Netcom told to build one each in two other cities. Trials due to finish by the end of the year, but delays mean they are not started until October and finished until early this year.

April 2008

China Mobile launches the homegrown 3G standard for 60,000 test users in eight cities:

Beijing

Tianjin

Shanghai

Shenyang

Guangzhou

Shenzhen

Xiamen

Qinhuangdao