If you build it, they will relent. That’s how China’s telecom operators have dealt with regulators at the Ministry of Information Industries (MII) for years.

Take the case of Little Smart, China’s “poor man’s cellular service.” China Telecom and China Netcom, the country’s two fixed-line operators, rolled out Little Smart in defiance of an MII stop order, grabbing a piece of the lucrative mobile market without licenses. The MII finally agreed to pretend Little Smart was part of the fixed line, and stopped trying to shut it down. Over 80 million Chinese now use the service.

China’s operators are up to their old tricks again, this time vexing the MII by jumping the gun in third-generation (3G) network rollout. China Mobile has been particularly aggressive: The world’s largest mobile operator by subscribers is hoping to build 3G trial networks on the WCDMA standard—the dominant flavor in Europe—license or not. The build-out effectively forces MII’s hand, all but assuring that China Mobile will receive the one WCDMA license it says it will issue. And with trial networks in place, China Mobile hopes it can hit the ground running when licenses are finally handed down, almost certainly this year. “These are trial networks in name only,” says analyst Chris Han of Beijing-based telecommunications consultancy Norson.

China Mobile has made no secret of its preference for the tried-and-true WCDMA over China’s homegrown TD-SCDMA (TD for short) standard, which was anointed as China’s national standard in January. China Mobile built over half of the 80 existing unauthorized WCDMA trial networks, says Mr. Han. Only eight were actually sanctioned by the MII, and those were supposed to include the three 3G standards Beijing is now considering.

Now, the MII is ordering operators to stop rolling out WCDMA and to deploy TD trial networks. “They have a specific plan as to which operators would be building networks based on what standards,” says Mark Natkin of Beijing-based Marbridge Consulting. “Now they’re trying to rein in development.”

But that won’t change much. China Mobile will still get its coveted WCDMA license, analysts concur. It makes sense, since the operator’s existing network can be upgraded without building another from scratch. And unlike TD, it will allow 3G subscribers from other markets to use their handsets in China during the 2008 Olympics—the MII’s coming-out party for China’s 3G services. “Our view is that China Mobile will upgrade to WCDMA, and end up being the dominant technology,” says Ted Dean, managing director of Beijing-based consultancy BDA.

That doesn’t mean it’s over for TD: The MII looks set to issue TD licenses to the fixed-line operators in the first half of the year, analysts say, to give them a head start over China Mobile, which won’t get its license until late 2006. China Telecom and Netcom, which have seen revenue growth from Little Smart falling off in the last year, will be happy to take what they can get—as long as it’s wireless.