China Mobile, which has been granted licence to offer 3G services on China’s indigenously built TD-SCDMA technology is planning to invest 600 million yuan to finance handset manufacturers and encourage them to develop TD-SCDMA terminals.

"The cooperation between China Mobile and mobile phone makers helps to develop better and cheaper 3G phones for users," said Miao Wei, vice-minister of industry and information technology to China Business News.

“At present, there is only a small group of 3G mobile phone users, and mobile phone makers are unwilling to invest much for such a small group. Therefore, the existing 3G phones are expensive and of poor quality. The models are not enough either," added Miao.

"Those mobile phone makers that make a timely response to the plan will finally get paid," said Miao.