There is a financial crisis afoot, Chinese mobile value-added services firms are struggling, but at least one analyst believes that companies will continue to reap big profits.

Wang Guoping, an analyst from China Galaxy Securities, said while being interviewed by that as the release time of China's 3G license is drawing near, more investments will be put into China's telecommunications market and the total investment in the industry is expected to be over CNY300 billion in 2009.

According to a report released by the National Bureau of Statistics of China on the development of China's telecommunications industry over the past 30 years, the investments in China's telecommunications industry increased from CNY260 million in 1978 to CNY237.01 billion in 2007, a growth of more than 900 times and an annual increase of 26.5%.

If the investments in China's telecommunications industry reach CNY300 billion in 2009, the growth rate for the year will be over 26.5%. Of these investments, a major part will be used in 3G network upgrading and capacity extension, said Wang. Influenced by the huge investments, the competition among Chinese operators in the 3G market will be severe in the next two years.

Wang further points out that compared with 2008, the investments put into China's telecommunications industry will grow significantly in 2009. At the same time, affected by the global financial crisis, overseas communications markets suffer demand decline and foreign equipment manufacturers may shift their focuses to China, where the effect of the crisis is relatively little. This situation will lead to severe competition in China's communications market in the coming year and the profits of telecom equipment will be reduced.


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