The Wireless Local Phone service system PHS currently operating in China uses two technical modes in Shanghai:

(1) The Time Division Duplex PHS wireless local phone, with a working frequency from 1900MHz to 1920MHz. The frequency is within the range of the TDD mode of third generation public mobile communication, 1880MHz to 1920MHz.

Most provinces and districts use this system, with a capacity of 30 million lines and 18 million users. Several towns and districts of Shanghai have recently started operations with limited users. The current problem is it cannot cover the whole city at present. Covering the whole city, especially the downtown area, needs a great amount of investment, which is a challenge for enterprise strategy.

(2) CDMAWALL is a wireless connection system of a Frequency Division Duplex, using the frequency range of the TDD system specified by third generation mobile communication. Several years ago, Shanghai Telecom used this technology to solve the problem of the temporary connection of wired telephone. Presently, the PHS service is under a trial operation with a capacity of 50,000. The system covers only the central areas of Shanghai, and cannot be used for the cross roaming of the PHS system in suburban areas. Besides, the use of the frequency must be terminated before the end of 2003, so it there is no space for development.

In essence, whether Shanghai will have a PHS system covering the whole city involves many issues. It takes immense consideration and knowledge, which is mostly up to the decision of the operator.