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China's 4G Expansion Dilemma

01-01 11:59 Caijing
Waiting for the industry chain to mature and at the same time avoiding missing the window of opportunity for TD-LTE is a test for government authorities in China.

By reporter Xie Li

China Mobile launched an integrated TD-LTE/LTE FDD network Dec. 18, 2012 in Hong Kong, which is a first in the Asia-Pacific region. Two weeks before that, the first TD-LTE video phone call was made in Chengdu, a city in southwestern China’s Sichuan Province.

TD-LTE represents a technological evolution over TD-SCDMA, third-generation (3G) mobile technology over which China has proprietary intellectual property rights. TD-LTE was recognized by the International Telecommunication Union (ITU) as one of three major international fourth-generation (4G) standards last October. The other two standards are WiMAX championed by the United States and LTE FDD backed by Europe. Tests show the peak rate of 4G mobile broadband can exceed 100mb, about 20 times faster than the 3G broadband rate.

In the 3G era, China is the only country to have adopted TD-SCDMA, which has isolated it from mainstream 3G technologies widely applied in other countries. Having learned its lesson, the Chinese government is now determined to facilitate the development of 4G technology. The Ministry of Industry and Information Technology (MIIT) stated Oct. 2012 that the TD frequency spectrum will include all 190 MHz frequencies within the 2.6GHz frequency range (2500-2690MHz). MIIT Minister Miao Wei said Sept. 2012 that China’s first 4G license will be issued in about a year.

As the government steps up the commercialization of 4G, China Mobile, currently the only carrier that employs TD-LTE technology, is also speeding up the construction of its 4G network. Having deployed trial networks in 13 major cities so far, China Mobile is aiming to set up trial networks in 100 large cities by 2013.

The company has also sped up the search for ideal terminal devices, announcing in mid-December 2012 that it would procure through an open tender 70,000 units of terminal devices, up from 34,000 units previously planned. This is the first tender China Mobile staged to purchase terminal devices for the 13 TD-LTE pilot cities.

Having lost ground in the 3G era, China Mobile wants to be an early mover in the 4G market.

The integrated TD-LTE/LTE FDD network China Mobile launched in Hong Kong has more symbolic meaning than practical significance. The Hong Kong branch of China Mobile won the TD-LTE frequency band in an auction Feb. 2012. Back in 2009, China Mobile obtained the FDD-LTE frequency band in Hong Kong and has offered relevant services. Currently, 4G businesses in Hong Kong are based primarily on FDD-LTE technology. China Mobile's primary goal is to prove the feasibility of its technology (i.e. roaming between two 4G modes), and is therefore urging the government to issue 4G licenses as soon as possible.

However, China Mobile’s fast-moving strategy was not echoed by the telecommunications industrial chain. More time is needed for mass production of high-standard 4G chips as well as the building of a nationwide network of 4G base stations.

Shi Guang, secretary-general of TD Forum, predicted that it may take strong chipmakers one year to develop 28 nanometer chips, and at least another two years to realize mass production (over one million units). “[This is] in addition to the time needed to develop workable software,” added Shi. In short, the industrial chain for high-standard 4G chips will not mature until at least 2015.

To establish a 4G network with nationwide coverage, aside from upgrading existing 3G base stations, China Mobile needs to set up numerous 4G base stations. This cannot be accomplished in a short time. It is reported that the construction of base stations in cities such as Chengdu will be postponed.

Industry insiders noted that the development path of TD-LTE will determine the international competitiveness of China’s communication technologies. Waiting for the industry chain to mature and at the same time avoiding missing the window of opportunity for TD-LTE is a test for government authorities in China.

Full article in Chinese: http://magazine.caijing.com.cn/2012-12-30/112401267.html

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