All three China operators to be awarded TD-LTE licences

Speculation over China 4G licensing continues to run hot. The most likely scenario is that China Mobile will be issued with its licence first, and not until toward the end of the year (zh) when its network is  commercial-ready.

But, according to one widely-reposted report Tuesday (zh), all three operators are to be awarded TD-LTE licences. If they wish to build out FDD-LTE networks, they will have to apply for a separate licence.

The obvious impact of this scenario, if true, would be to give the home-grown technology - and China Mobile - a head start.  But it may perhaps be designed also to put pressure on China Telecom, the smallest mobile player. 

Whereas W-CDMA operators China Unicom clearly plans to upgrade to FDD-LTE, China Telecom, which runs an EV-DO network, is pressured by the enormous 4G capital cost and the  deeper pockets of its rivals.

Speaking at the company's annual results announcement in March, China Telecom CEO Wang Xiaochu expressed a preference for FDD because of the lower equipment cost. But he also held open the door of using the China Mobile network if he couldn't obtain an FDD licence. 

In any event, there's no suggestion Unicom or Telecom will be forced to actually build a TD network. They will simply have to wait awhile. Given that they are at least a year behind China Mobile in 4G preparations, that is no handicap.

China green-lights MVNO plan: foreigners need not apply

In a move more symbolic than substantive, China is to go ahead with an MVNO service pilot, allowing private players to enter its telecom market for the first time.

Participants must be at least 50% privately-owned and have no more than 10% foreign ownership, the MIIT stipulated in regulations posted to its website (here via C114.net) on Friday.

The three state-owned network operators – China Mobile, China Telecom and China Unicom – are barred from forging exclusive partnerships. They must sign up at least two MVNOs within four months of receiving the first application.

The long-awaited issue of regulations follows an unprecedented one-month industry consultation early this year. However, little if anything seems to have changed from the guidelines published in January.

The single biggest factor issue – the operators’ wholesale price – is still where it was: no lower than the operators’ lowest retail price.

This being China, MVNOs must also establish a network "security management system," even though they are barred from owning or operating a network. They are obliged to build billing and customer care systems and “appropriate” sales outlets and operational locations.

Industry websites have speculated that the first MVNOs could start as early as July, but given the preparation required, the first service is more likely to be at the end of the four-month window.

Although these are officially dubbed pilot services, it is very rare in Chinese telecoms for a large-scale trial not to be upgraded to full commercial level.

Dozens of firms are said to be interested in becoming MVNOs. However, the most likely new entrants are electronics retailers such as Suning, D.Phone and Gome, with established brands and handset distribution channels.

China Mobile delays giant 4G tender

China Mobile’s massive TD-LTE tender has been delayed because the operator can’t decide whether to build a new network or upgrade from 3G.

The tender, for 200,000 base stations and 100 cities, was originally planned to start in April. Estimates of its value range wildly from $6.75 billion to as much as $30 billion.

However, executives are said to be undecided whether to buid primarily as an upgrade from the existing TD-SCDMA network using F-band spectrum (1880-1920), or to roll out new base stations using the D-band (2570-2620).

It is more than an arcane technical issue. An upgrade would favour the incumbent TD-SCDMA vendors – Huawei, ZTE and small state-owned player Datang Mobile. A new build would put all vendors on a level playing field.

According to 21^st Century Business Herald (posted here on Sina Tech), the tender was supposed to have been issued in April, but will probably not be called until June.

Ericsson China executive vice-president Eric Feng told a briefing in Guangzhou yesterday China Mobile hadn’t yet issued tender documents because executives “still haven’t reached final consensus.”

So far China Mobile has rolled out limited scale TD-LTE trial networks in 13 cities, with contracts allocated among five vendors. The 2013 network is its major commercial-scale buildout ahead of formal launch, which is expected to be in the second half of the year.

Feng told journalists that the trials showed that an upgrade from 3G would suffer from interference and limited network functionality.

His recommendation was pretty much to script. Given these issues, and China Mobile’s tight timetable, Ericsson believed that the “new build is the best option,” Feng said. 

China Mobile iPhone deal by Q3?

Pretty much everyone who watches Apple and/or China Mobile expects the world’s most valuable company and the biggest mobile operator on the planet to stirke an iPhone deal some time this year.

Each for its own reasons needs the other more than ever, while the convergence of 4G standards means the elimination of the TD-SCDMA barrier.

This story in the respected Southern Metro Daily newspaper (Ch)  thus isn’t news, and it isn't definititive, but confirms that China Mobile is thinking along the same lines.

A China Mobile source says the company believes that with Qualcomm’s new convergence chipsets, Apple will no longer have to make standalone phones for Mobile’s standalone 3G network, enabling the pair to work together.

At the earliest, that will happen in the third quarter when the sixth generation iPhone is likely to be released. Qualcomm’s chipset offers five modes - TDD FDD LTE, W-CDMA and TS-SCDMA, and GSM/GPRS – in ten spectrum bands.

China Mobile has built out a trial TD-LTE network in 13 cities and will expand that to more than 100 cities this year. It has begun commercial trials in Hangzhou and Shenzhen. 4G licences have not been issued, but reportedly China Mobile will be the first to obtain one (Ch)  in October.

China Mobile’s TD-SCDMA network doesn’t allow roaming and offers a limited handset choice, causing it steadily lose ground to its rivals in 3G, where it accounts for just 41% of customers. Both its rivals, China Unicom and China Telecom, offer the iPhone.

If Apple and China Mobile do reach a deal, the signs are good. In Guangdong, China’s richest province, China Mobile already has almost as many iPhone users plugged into its 2G network as China Unicom has on its 3G network.

Nokia appoints fourth China CEO in three years

Nokia China and Huawei have both swapped out the heads of their handset operations – but that’s where the similarity ends.

Gustavo Eichelmann, Nokia’s China chief since the beginning of 2012, has left the company for “personal reasons”, Nokia announced Monday. He will be replaced by Erik Bertman, the head of Nokia Russia, effective June 1.

Eichelmann’s departure follows the collapse of Nokia’s share of China’s smartphone market last year – from market leader, with a 29.9% share in 2011, down to seventh with just 3.7% share.

Bertman, a Swedish national, is the fourth head of Nokia’s China business since the beginning of 2010.

He has the job ahead of him. Nokia’s global devices sales were down 32% year-on-year in Q1. Handset shipments were off 25% and smartphone shipments fell by a scary 49%.

As he wings his way to Beijing Bertman may cross paths with Wan Biao, Huawei’s terminals group CEO, who has just been sent to Moscow. In a promotion for Wan, he will head up all of Huawei's operations in Russia, one of the Huawei’s target ofshore markets.

Wan will be replaced by Yu Chengdong, who will retain his current title of chairman of the terminals unit.

In contrast with Nokia’s declining fortunes, the Huawei’s devices team is on a roll. Of course, the popularity of Huawei's affordable smartphones is one reason why Nokia is struggling.

Huawei boosted devices revenue 8.4% to $7.9 million last year and shipped 32 million smartphones. It’s aiming for 60 million this year.