Hong Kong’s telecommunications sector is headed for a shake-up that could test the patience of consumers and local network operators, after the government’s decision to reassign the existing 3G mobile spectrum. The Communications Authority said the government would auction off a third of the 3G spectrum currently held by each of the city’s four incumbent 3G mobile network operators in the fourth quarter next year. But the government will also offer the operators – SmarTone Telecommunications, CSL, Hutchison Telecommunications’ Three Hong Kong and PCCW’s HKT – right of first refusal to be reassigned two-thirds of the spectrum they now hold. Their licenses are due to expire in October 2016, when each operator will make HKD151 million in royalty payments. Authority Chairman Ambrose Ho said this “hybrid” approach would “encourage competition and allow new investment to enter the local market. It is more likely to promote innovative services from new 3G spectrum assignees and the incumbents”. China Mobile has expressed an interest in bidding for the reassigned spectrum. The four operators expressed their disappointment, raising the specter of service degradation, including slower download speeds, when chunks of their spectrum are removed from service in October 2016. Hutchison Telecom accused the government and in particular the Communications Authority of total disregard for the public’s interest. The operators’ lawyers are considering litigation.

SAP, the world’s largest supplier of business management software, plans to ramp up the adoption of cloud-computing services by local and multinational companies in China, following the launch of an expanded cooperation agreement with China Telecom. A joint venture between SAP and China Communications Services (CCS), a Hong Kong-listed subsidiary of China Telecom, will now include delivery of cloud offerings nationwide, starting with advanced human capital management (HCM) solutions from SAP unit SuccessFactors. SAP said it was the first international software supplier to bring an integrated HCM offering under a software-as-a-service (SaaS) platform hosted in a Chinese data center. Telecommunications services firm CCS has signed up to be the first customer and is expected to have 12,000 users. The ambitious initiative is part of SAP’s ongoing five-year, USD2 billion investment program in China.

China’s manufacturing sector requires more 3-D computer-aided design (CAD) software products as it moves up the value chain and competition intensifies, said Zi Yingkun, General Manager of the 3-D division of ZWCAD Software Co, a major domestic CAD software developer. Guangzhou-based ZWCAD made its foray into the 3-D market in 2010 after acquiring VX Corp, a U.S. company that focuses on 3-D products. “The number of our 3-D clients has doubled every year since then,” Zi said. In the domestic market, ZWCAD has more than 500 clients with 3,000 authorized licenses. 3-D represents the future of industrial design, Zi said. Systems can be more easily tested when being designed with 3-D software, reducing the risks of failed designs. ZWCAD has been integrating products with management software companies, such as CoreTech System Co, a Taiwan-based plastic injection molding simulation solution provider, and the U.S. software developer ANSYS.

Chinese telecom equipment vendor Huawei Technologies announced that it will invest at least USD600 million in research and development (R&D) of fifth-generation (5G) mobile technology by 2018. In May, South Korea-based Samsung Electronics said that it successfully tested super-fast 5G technology that allows users to download a film in just a few seconds. Shenzhen-based Huawei expects that the first 5G networks will be ready for commercial deployment starting in 2020. The technology will deliver peak data rates of more than 10 gigabits per second, or 100 times the speed of current 4G networks. Huawei has participated in the European Union’s 5G research projects, helped establish the 5G Innovation Center in Britain, and participated in joint research programs with more than 20 universities around the world. In 2012, Huawei invested USD4.8 billion in R&D, accounting for 13.7% of its annual sales. The company’s R&D investment surpassed CNY130 billion over the past 10 years. Vice Minister of Science and Technology Cao Jianlin said recently that the Ministry will increase its investment and support for 5G technology, after allocating about CNY160 million to R&D work on 5G technology in China this year. Not only smartphones and tablets, but also vehicles, meters, medical devices and home appliances, will be connected to the network using 5G technology.

Huawei Technologies, the third-largest smartphone vendor, is focusing on a gradual growth strategy instead of acquisitions to chase Samsung Electronics and Apple for market share, Vice Chairman Eric Xu said. “We’re not expecting an explosive development of our smartphone business, rather we want to grow that business step by step,” Eric Xu told reporters in London. “Ultimately we want to be the leading brand worldwide in smartphones, but it will take a while to get there.” Xu confirmed Huawei’s smartphone growth target of 10% this year and next. The company is relying more on handsets while it fights cyber security concerns that have restricted its access to the U.S. and Australian phone equipment markets. Huawei, China’s largest supplier of telecommunications networks, isn’t planning an acquisition to bolster its position because of potential product overlaps, he said. The comments would damp speculation over a link-up by the Chinese company with takeover targets such as France’s Alcatel-Lucent and BlackBerry of Canada. Huawei hasn’t held any discussions with BlackBerry, said Xu, who is also acting CEO under a rotating arrangement set up two years ago by the closely-held company. Huawei shipped 12.5 million smartphones in the third quarter, taking 4.8% of the global market, trailing only Samsung’s 31% and Apple’s 13%, researcher International Data Corp (IDC) said last month. Huawei is closely trailed by Lenovo Group, which held 4.7% of the global smartphone market in the quarter with 12.3 million units shipped, and LG Electronics at 4.6% with 12 million unit shipments, according to IDC. Smartphones helped boost Huawei’s sales 11% in the first six months this year to CNY113.8 billion, the South China Morning Post reports.