Despite the huge size of the market, 65 percent of the country's population does not own a mobile phone.
But the market is growing explosively, adding 19 million new mobile connections every three months, according to research consultancy Ovum.
China Mobile, the world's largest mobile phone carrier, not only dominates the market with a share close to 70 percent, but is growing faster than its local rivals.
The company has invested $5bn in rolling out China's first 3G network focusing on China's home-grown 3G technology, TD-SCDMA.
Although the government has still not issued 3G operating licences to carriers, China Mobile is widely expected to receive priority.
The government plans to have the TD-SCDMA network operating in China's largest cities in time for the Olympic Games in 2008. Carriers are also planning to operate networks using existing foreign-developed 3G technologies.
"If China Mobile succeeds, we forecast its TD-SCDMA connections to represent five percent of its total connections by the end of 2010," said Joss Gillet, a senior analyst at Wireless Intelligence, a research organisation run jointly by Ovum and the GSM Association.
China Mobile's TD-SCDMA connections could reach 100 million by 2012, Gillet predicts.
The company is also looking at overseas expansion into earlier markets, according to recent statements from chief executive Wang Jianzhou.
China on track for half a billion mobiles
By Simon Burns on Aug 29, 2007 2:12PM