China to become largest 4G market: ALU chief

China will become the world's largest 4G market and the country is a model the rest of the world should follow when it comes to telecommunications, Michel Combes, CEO of Alcatel-Lucent (ALU), said on Friday.

In an exclusive interview with Xinhua, Combes said, "China has seen exponential growth in 4G and such growth is fascinating."

Last month, the Ministry of Industry and Information Technology (MIIT) issued 4G licenses to three Chinese telecom operators, marking the beginning of a new era in the country's high-speed mobile network.

The MIIT forecasts that total 4G investment in 2014 will reach 100 billion yuan (about 16 billion U.S. dollars).

"The United States started 4G a bit earlier, but China is developing fast. With 4G expanding, I believe China will become the largest 4G market in the world," said Combes.

China is already the world's largest market for mobile data services and mobile devices, growing by more than 50 percent each year. Industry analysts say China will see massive data growth in the coming years due to increasing demand.

"The Chinese government paved the way for the complete transformation of its telecommunications industry, with clear vision, more freedom to operators and bigger investment, which created a healthy eco-system," Combes said.

The CEO envisioned the next five to ten years as "an exploding period" for the telecom industry, driven by an extraordinary number of devices connected to the network. "I'm super optimistic about the future, the digital economy," he added.

Combes said that China is "at the heart of his global strategy". Revenue from the Chinese market registered more than 10 percent growth from 2012 to 2013.

Through its flagship company Shanghai Bell, ALU won a contract from China Mobile, the largest telecom operator, to deploy 11 percent of its 4G LTE network, consisting of more than 200,000 TD-LTE base stations.

It will provide China Telecom with more than 9,892 base stations. The 4G plan of China Unicom, the third major mobile operator, has yet to be announced.

According to ALU data, the company is the top three telecom-equipment supplier for Chinese mobile operators.

Shanghai Bell is a joint venture established in 1984. ALU holds a 50percent stake, while China's State Assets Supervision and Administration Commission, the country's state assets watchdog, holds the other half.

"Since the establishment of the partnership, ALU started by introducing advanced technologies, like switching equipment, into China. But now China has more than caught up and the trend is becoming opposite," said Combes.

"Now the Chinese telecom market is extremely advanced and evolving fast, especially in LTE transition. Now we develop knowledge and products in China and then leverage them outside China," he said, "it is a balanced co-innovation partnership."

In the transition to LTE, the U.S. and China are clearly ahead, while Europe is lagging behind.

"Although mobile technology started in Europe 20 years ago, now only six percent of 4G customers are in Europe. The rest are either in the U.S. or in Asia," Combes said.

The CEO said he has pled on several occasions for European governments to unlock investment in telecoms, because he strongly believes that "it drives GDP growth".

This year marks the 50th anniversary of the establishment of diplomatic relations between China and France. Speaking about the technological cooperation between the two countries, Combes said both governments have the willingness to cooperate and have enjoyed a history of technological partnership.

"I am a strong supporter of the close cooperation between China and France. I look forward to strengthen the cooperation through Shanghai Bell," he said.