The Chinese government could start issuing 3G mobile licences as early as this week according to local press reports.

Years in the making, the government is ready to put into action a master plan that will pave the way for the long awaited introduction of third generation services.

This latest development follows a shake up of the industry announced in May, and will likely see leading wireless player China Mobile landed with a licence to deploy China’s homegrown 3G technology, TD-SCDMA.

The country’s remaining wireless players, China Unicom and China Telecom, are likely to be given WCDMA and cdma2000 licences respectively.

The idea behind the market reshuffle, according to the Ministry of Industry and Information (MII), the Ministry of Finance and the powerful National Development and Reform Commission (NDRC), is that the restructuring process will create three strong, integrated operators.

It has long been suggested by industry pundits that because of TD-SCDMA’s less-than-stellar performance in trials, the government would accede to China Mobile’s wishes and grant it a WCDMA license alongside its TD-SCDMA one. However, it’s also well known that the government has devoted vast financial and political resources into the development of TD-SCDMA, and is unlikely to allow China Mobile to shuffle the technology toward the back door by granting it a WCDMA license. The lack of any such announcement this week seems to support this notion.