China Tuesday announced that it has successfully developed the nation's first indigenous 3G mobile phone chipset, breaking the long-held monopoly of multinational firms over the technology in the world's largest cellular phone market. The new 3G (third-generation) standard mobile phone chipset was developed by the Shanghai branch of the Spreadtrum Communications Inc., a leading provider of wireless integrated circuits software solutions, a senior official of China's Ministry of Information Industry was quoted as saying.

The development will fundamentally decrease Chinese companies' dependence on foreign intellectual property and significantly lower the amount of intellectual property fees paid to foreign communications firms, the official told Xinhua news agency.

"This means Chinese companies are quite likely to compete in an active way in the future instead of the passive one in the past," said the official.

China boasts a total of more than 300 million cell phone users - the largest in the world.

In the market, a single chipset is sold at US $25 to US $50, making up 50 to 70 per cent of the cost of the phones. Chinese cell phone makers pay more than US $10 billion to import chipsets.

China's mobile phone giants like Amoi, Bird, Lenovo and Hisense have already signed agreements with some Chinese chip makers to use the so-called "China chip" in producing mobile phones that are truly "made in China."