China, Taiwan to issue LTE licenses in '13

Nicole McCormick/Ovum
13 Jun 2013
00:00

The Chinese press recently reported that sources “close to the Ministry of Industry and Information Technology (MIIT)” have stated that the MIIT is planning to issue TD-LTE licenses to all three Chinese MNOs – China Mobile, China Unicom, and China Telecom. The licenses are expected to be issued in 2013.

However, the problem is that only China Mobile wants a TD-LTE license as it is a natural evolution from its TD-SCDMA air interface. Issuing China Mobile with a TD-LTE license as early as this year would also enable it to better compete with China Unicom’s HSPA service.

Taiwan’s regulator, the National Communications Commission (NCC), has also announced plans to auction 270 MHz of spectrum in the 700-MHz, 900-MHz, and 1800-MHz frequency bands for LTE in September 2013. Before this spectrum is awarded though, Ovum urges the NCC to allow telcos to offer tiered pricing for LTE. This will enable operators to better monetize increased data usage from LTE.

TD-LTE licenses for all three Chinese operators makes no sense

The Chinese government is a big proponent of TD-LTE. While the Chinese-developed air interface TD-SCDMA failed to gain traction outside of China, this time around the government has helped TD-LTE to find a global audience by harmonizing it with FD-LTE. TD-LTE’s integration with FD-LTE ensures significant royalties for Chinese state-owned companies as a number of TD-SCDMA patents have been incorporated into TD-LTE.

While we understand the Chinese government’s push to internationalize TD-LTE, we fail to see why it is insisting that all three Chinese MNOs pursue TD-LTE strategies. China Mobile will have rolled out 200,000 TD-LTE base stations (covering 500 million people across 100 cities) by the end of 2013. It is eager to migrate users to 4G as soon as possible given the lackluster uptake of TD-SCDMA services, which have been hampered by a lack of attractive smartphones.

China Unicom and China Telecom, which currently have HSPA and CDMA2000 networks respectively, want to deploy FD-LTE networks. China Unicom wants to adopt FD-LTE as it is the natural technology upgrade path for the operator, while China Telecom wants to deploy FD-LTE because it has a more mature device ecosystem than TD-LTE. While China Unicom and China Telecom can still reportedly apply to the MIIT for FD-LTE licenses, there is likely to be a considerable delay on the issuance of such licenses.

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