China’s top three operators may be gearing up for LTE rollouts, but 3G will likely remain a staple in the country for years to come, especially for China Unicom.
Research from IHS iSuppli has shown China’s investment in LTE is set to double this year to $100 million as the country’s carriers upgrade their networks. This figure is expected to triple to $300 million in 2012, hit $600 million in 2013 and finally $1.3 billion in 2014.
However, these optimistic figures still lag behind the country’s projected investment for 3G.
“LTE will be a niche market in China in the coming three years,” says Kevin Wang, director of China Research at IHS. “All three carriers in China will continue to focus on developing 3G networks and users to improve ARPU.”
The same study showed 2G and 3G spending by China’s carriers would hit $4.12 billion in 2011, but gradually fall to $2.27 billion in 2014, a figure still almost double that of projected LTE spending.
Meanwhile, the LTE charge in China is expected to be led by China Mobile, the country’s largest carrier by subscriber base, which expects to launch LTE this year. China’s two other mobile operators, China Telecom and China Unicom, will follow suit in 2012 and 2013 respectively.
“China Telecom and China Unicom have limited capex for LTE networks,” says Wang. “These two carriers would prefer utilizing 3G and WiFi for now in to provide high speed wireless connections to their subscribers.”
China Unicom has the least motivation to deploy LTE and 4G due to the ‘reliable’ state of its current network, the report says. The carrier holds a bandwidth advantage over its competitors due to its W-CDMA network and future HSPA+ could provide download bandwidth speeds of up to 40MBps and upload speeds of up to 11MBps.
The carrier is also the country’s sole retailer of Apple’s iPhone, and can expect to reap significant ARPU rewards resulting from the device.
“Today, there is no strong need for LTE networks. LTE devices are extremely limited in availability and 3G and 3.5G networks are capable of supporting most mobile applications,” says Wang.