Mainland telecommunications operators will conduct third-generation (3G) field trials in the second half of this year, but telecommunications equipment supplier UTStarcom does not expect licences to be issued until next year. 'We don't see 3G licences coming out any time soon,' said UTStarcom president and chief executive Hong Liang Lu. 'The soonest would be the first half of 2004.' UTStarcom, the largest supplier of equipment for the mainland's Xiaolingtong networks - a wireless local loop network that offers limited mobile service within a city - would benefit from any delay in China's 3G launch. The 3G field trial is expected to last at least six months. UTStarcom said it had more than US$1 billion in orders for deploying Xiaolingtong networks in the pipeline, running into the first quarter of next year. A Credit Suisse First Boston (CSFB) survey found more than 65 per cent of Xiaolingtong users said they would switch back to mobile services if similar tariffs were offered, with another 21 per cent saying they would use both. According to a survey conducted by CSFB and BDA China, about 9 per cent of China Mobile's users and 12 per cent of China Unicom's also subscribe to Xiaolingtong services to enjoy low tariffs for local calls. The survey found these Xiaolingtong users had an average monthly income of 3,000 yuan (HK$2,811), compared with 2,500 yuan for mobile subscribers. 'As such, contrary to conventional wisdom [at least in the cities surveyed], [Xiaolingtong] is attractive to high-end subscribers, as well as low-end subscribers,' the CSFB report said. 'With the momentum that China Telecom is building with [Xiaolingtong] and its aggressive handset tariff promotions, we believe that the company is gearing up to become a serious mobile communications player.'