Information boost

Telecom providers given nationwide 4G licenses

China United Network Communications Ltd and China Telecommunications Corp were awarded nationwide FDDLTE 4G licenses by the Ministry of Industry and Information Technology on Friday.

The ministry said it has officially granted FDDLTE licenses to the country’s No 2 and No 3 telecom service providers respectively in an effort to help boost information consumption in the country.

“Fully commercializing FDDLTE business will help China Unicom and China Telecom build bigger 4G networks and offer better services to customers,” said MIIT in a statement, adding the move will also bring down the price of 4G services in the country.

The issuing of the licenses was viewed by analysts as good news for both firms in terms of converting their 3G users into 4G users, but they said that it will hardly reshape the landscape of China’s 4G market, which is still dominated by China Mobile Communications Corp.

But with the licenses in hand, China Telecom and China Unicom are expected to move fast to expand their 4G services and customers across the country, said Peter Liu, a telecom analyst with technology research firmer Garter Inc.

“Previous research showed that more than 40 percent of 3G subscribers are eager to convert to 4G. So if the price is the same and there is no need for them to change smartphone numbers, the two telecom operators can easily convert their 3G users in to 4G users,” said Liu.

Xiang Ligang, an independent telecom analyst, said the top priority now for China Unicom and China Telecom is to move fast to expand their 4G service across the country.

“They will significantly invest to boost 4G service coverage in order to grab more market share,” he said.

But given China Mobile’s huge user base and its first mover advantage in 4G, Xiang said it is unlikely for China Telecom and China Unicom to change the market landscape with the newly gained FDDLTE licenses.

MIIT granted TDLTE 4G licenses to the three mobile telecom carriers in December 2013 and approved experiment of TDLTE/ FDDLTE convergence networks undertaken by China Telecom and China Unicom in June 2014.

However, because neither China Telecom nor China Unicom adopts the TDLTE technology — a Chinese self-developed 4G standard — China Mobile, the country’s largest mobile carrier by subscribers has become the biggest winner of the 4G market as for the past year, it was practically the only player in the market.

Statistics from MITT show that, China boasts nearly 97 million 4G users in 2014, out of which 90.06 million are subscribers of China Mobile.

The huge user base means the entire ecosystem for the TDLTE network, the 4G standard China Mobile favors, has been completed over the past year, said Bryan Wang, vicepresident and country manager for China with multinational tech consultancy Forrester Research.

“It is amazed that China has become the world’s largest population in 4G with TDLTE standard within just a year and as a result more chipmakers and smartphone makers have launched products that support the TDLTE standard.”

With more smartphone makers supporting TDLTE, the room left for China Telecom and China Unicom to fight in 4G market has shrunk, said Wang.

MITT said on Thursday that China is expected to add more than 200 million 4G users this year. China Mobile said in the same conference that it aims to top 250 million 4G users by the end of 2015, which means the company itself wants to add about 160 million new 4G users in a year.