The 3G Momentum has just picked up in China. China Mobile [CM] has continued to expand its TD-LTE trial network, and targets to have 200K BTS by the end of 2013. In 2012, the company expanded the trial to a total of 13 cities. CM’s pre-commercial TD-LTE trials were conducted on MiFi and router devices. Since TD-LTE supply chain is lagging the FDD-LTE supply chain by a year, do not expect the TD-LTE chipset supply chain to mature before 2014 and the Chinese government may issue 4G commercial licenses only by end of 2013. CM will consider focusing on subsidizing the high-end segment only after the launch of 4G / TD-LTE.
China Mobile is faced with the challenge for TD-LTE as it is in the high frequency band (2500-2690MHz), as operators will likely face coverage and indoor penetration issues. Softbank in Japan and Clearwire in the US, have indicated a slowdown in TD-LTE network rollout in recent months. Softbank started to roll out a parallel FDD-LTE network after the company acquired a FDD-LTE spectrum, especially around the launch of iPhone 5, compatible with FDD-LTE.
TD-LTE vs FDD-LTE Regulations in China
The Chinese MIIT announced that the entire 190MHz spectrum in 2500-2690MHz band would be allocated for TD-LTE, whereas 120MHz unused spectrum in 1800MHz and 2100MHz bands would be allocated for FDD-LTE.
China Telecom and China Unicom on 4G LTE
The possibility for China Telecom to deploy a core TD-LTE network nationwide remains low, as the cost of a nationwide TD-LTE network without TD-SCDMA will be very high. China Unicom will take a gradual approach on 4G network rollout given its 3G technology advantage. The company will have a value chain advantage as the majority of 4G handsets will also be backward compatible with WCDMA.
Industry Experts have a split opinion on TD LTE and what that means for long-term competitive dynamics and market shares in China. In the absence of clear visibility on how 4G impacts the Chinese mobile market, we assume that 4G is fully commercial and ready for the mass market in China by 2015-16. What say ?
We will see four quintuple-mode TD-LTE smartphone models: Samsung GTI9308C and GT-I9308D, Huawei D2 and ZTE U9810, which can support TD-LTE, FDD-LTE, TD-SCDMA, WCDMA and GSM. They are still prototype phones and expect commercial TD-LTE smartphone will be ready after 4Q13.