4G era closer after granting of licenses

China's wait for 4G technology may soon be over, with the Ministry of Industry and Information Technology (MIIT) announcing Wednesday that the country's three telecom carriers had been granted 4G licenses based on the homegrown 4G TD-LTE technology.

China Mobile, China Unicom and China Telecom had recently applied for 4G TD-LTE licenses, and the MIIT said it granted the licenses in accordance with WTO principles.

China Unicom and China Telecom had both expressed a willingness to adopt a convergence of TD-LTE and rival standard LTE FDD technology.

The evolution and maturity of TD-LTE technology make it qualified for a commercial launch, while the granting of LTE FDD licenses will happen when the conditions are right, the MIIT said in the statement, without giving an exact time frame.

The Wednesday announcement came roughly five years after the granting of 3G licenses in 2009. The ministry said 3G-related investment directly contributed 211 billion yuan ($34.6 billion) to the country's GDP growth in the first three years after the commercial launch of the 3G network.

Though the 4G licenses will boost the overall economy and the telecom sector, it will also put China Mobile's two smaller rivals, China Unicom and China Telecom, under great pressure, industry analysts said.

The two smaller telecom operators will face growing challenges in retaining the high-end consumers they gained from China Mobile during the 3G era, Bryan Wang, vice president and principal analyst at Forrester Research, told the Global Times on Wednesday.

Also, as China Mobile has been the country's most active supporter of the homegrown TD-LTE standard, this can help it achieve dominance in the development and deployment of the technology, Wang noted.

China Unicom has greatly benefited from its partnership with Apple in the era of 3G, but will face greater pressure during the transition to 4G, he said

China Mobile's 4G investment will amount to 41.7 billion this year, and the number of TD-LTE base stations it plans to establish this year is around 200,000, information portal qq.com reported Wednesday, while also revealing that the company plans to expand its TD-LTE coverage to more than 300 cities nationwide.

China Mobile is likely to have an edge over its rivals, Ma Jihua, a telecom analyst with Beijing Daojing Consultant Co, told the Global Times on Wednesday.

Adding to China Mobile's ammunition, the MIIT also announced Wednesday that the company would be allowed into the country's market for fixed-line broadband.

Hong Kong-listed China Mobile saw its shares edge up by 0.90 percent after close of trading Wednesday. China Unicom and China Telecom saw their shares fall by 0.33 percent and 1.93 percent, respectively, on the Hong Kong Stock Exchange.

The three telecom carriers gave no comment on the licenses when contacted by the Global Times on Wednesday.

For most consumers, 4G technology - which is theoretically capable of offering download speeds of up to 100 megabits per second, nearly 10 times the rate delivered by the 3G network - is an exciting prospect.

Zhang Qian, a China Mobile subscriber in Beijing, who has seldom used 3G services due to the carrier's relatively poor 3G performance, told the Global Times Wednesday that she hopes to try China Mobile's TD-LTE services when they are launched.

Recent media reports saying that Apple is close to a deal to offer TD-LTE-compatible iPhone models in partnership with China Mobile have further heightened Zhang's expectations.

Both Wang and Ma forecast a substantial cut in charges for data usage after the commercial launch of 4G services, which may help spur the popularity of 4G smartphones.

The use of 4G technology requires smartphones running the 4G standard, and currently only a few models support the technology.

Shipments of smartphones supporting 4G technology are expected to hit 120 million units in China in 2014, when the country's total smartphone shipments are expected to exceed 450 million, said a research report released in September by US-based market research firm IDC.