China's telecommunications market is expected to outstrip that of Japan with the revenue hitting US$187 billion by 2014, and become the largest telecom market in the Asia-Pacific region.

Commercial operation of 3G technologies and increased penetration rate of mobile communications in the broad rural regions are the major driving forces for the growth of China's telecom market.

As an emerging market, the growth potential of China's mobile communication user number is large. China added 71.2 million mobile communication users in 2008, accounting for about 12 per cent in the world's total, right next to the 113 million gained in Indian telecom market.

With the rapid growing of the penetration rate of China's mobile telecom service subscriber number, contribution of mobile communication to the revenues of the whole telecom industry will be increasingly larger.

Pyramid expected that the penetration rate of China's mobile users will reach 58 per cent by the yearend, and top 80 per cent at the end of 2014, when revenues from mobile communication business will take up 76 per cent share in that from all the telecom services.

The increase of China's mobile communication industry will be able to resist the economic downturn, as both the arrangement and commercial operation of 3G networks and the popularity of mobile communication services in rural regions have boosted the economic growth.

For instance, China's leading telecom operator China Mobile (SEHK:0941) has earmarked 30 per cent of the expenditures on expanding 2G networks, and decided to spend the rest 70 per cent on related construction in the rural market.

Since the issuance of 3G licenses at the beginning of this year, China's telecom operators launched 3G network construction at once, and their competition intensified further.

The number of phone users in China has surpassed one billion by the end of June, boosted by the launch of the third-generation (3G) network, statistics from the Ministry of Industry and Information Technology (MIIT) has shown.

China added 43.5 million phone users during Jan-June, bringing the total to 1.025 billion.

During the period, fixed-line telephone users dropped by more than 10 million, while mobile phone users jumped by nearly 54 million.

To improve 3G network efficiency, China's top three telecommunication operators, China Telecom, China Mobile and China Unicom, invested 80 billion yuan (US$11.712 billion) so far this year.

China's top three telecommunication operators, China Telecom (SEHK:0728), China Mobile and China Unicom (SEHK:0762), have started trial 3G operation, which allows mobile phone users to download data faster, make video calls and watch TV shows.