China issues new 4G licenses

China's telecom authority on Friday granted 4G licenses to two operators.

China Telecom and China Unicom were permitted to offer services based on LTE FDD technology after large-scale testing since last June, according to the Ministry of Industry and Information Technology (MIIT).

LTE FDD was the first external 4G technology introduced to China. The MIIT issued 4G licenses to China's three telecom giants at the end of 2013 allowing them to use the homegrown TD-LTE standard.

Both standards are well recognized globally. LTE FDD is popular in Europe and has been in commercial use for years, while the TD-LTE has been used in China for over a year.

There are 17 commercial mobile networks around the world combining the two standards, according to MIIT statistics.

"The approval of FDD will allow two standards to compete in the market. More mature technology and better services can be expected," said telecom analyst, Zeng Tao.

China Mobile, the country's largest telecom provider in terms of user numbers, currently leads 4G business with 90 million 4G subscribers last year and 240 million cell phones sold.

China Mobile's dominance will be challenged as LTE FDD is expected to help China Telecom and China Unicom attract more users.

China Unicom's shares in Shanghai exchange rose 5.6 percent and shares of Hong Kong-listed China Telecom advanced by 0.4 percent. China Mobile dipped 1.5 percent in Hong Kong.

The new licenses will intensify competition between the operators and bring lower service fees, accelerating the development of mobile networks, said Peng Daqi of Chongqing University of Post and Telecommunications.

The ministry has forecast 200 million new 4G users in 2015 as more than 600,000 base stations will be built.