China Mobile takes on the world with TD-LTE

On the devices side, the operator has worked with more than ten major semiconductor and equipment manufacturers, including Apple, to place their bets on TD-LTE. Their warm reception toward the 4G technology is not surprising since populous markets like Japan and India will be jumping onto the same bandwagon.

Moreover, in view that large-scale trials of TD-LTE will easily span over another year across key cities in China, it will provide sufficient time for handset manufacturers to roll out multi-mode dual-standby TD-LTE devices in 2012.

A key question is: when will TD-LTE hit the China market? A few weeks ago, Zhang Feng, director of the Telecommunications Development Department of the MIIT, pointed out that the issuance of the licenses will depend on when the technology will mature. This sends a clear signal that the Chinese government is in no hurry to launch TD-LTE.

A possible reason is that 3G is just starting to gain steam in China and the government may wants telcos to maximize their huge investments - China Mobile spent RMB 141.9 billion ($21.9 billion) developing TD-SCDMA. Even though the Chinese government clearly supports TD-LTE, it would not be surprising if the regulator holds off the 4G spectrum allocation until TD-SCDMA generates a higher yield.

However, if China wants to promote TD-LTE to the world, it has to showcase its success back home as quickly as possible. With this in mind coupled with phases of the trial testing due for partial completion by next year, we can expect TD-LTE to be deployed in selected cities by late 2012. Despite the technological superiority of 4G, 3G will continue to enjoy a healthy growth rate in China. We are confident that 3G subscribers will take up 32.5% of the market share by 2016.

As TD-LTE matures over the next three to five years, the MIIT may well mandate the use of its home grown 4G standard among all China mobile operators so that domestic companies will no longer need to pay foreign patent owners millions of dollars for international standard licenses.

Serene Chan is an industry analyst for Frost & Sullivan's ICT practice, Asia Pacific. For more info contact: [email protected] or [email protected]

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