China Issues 4G TDD Licences

The 4G era in China has officially kicked off, at least symbolically, with the issue of LTE TDD licenses and spectrum to the three state-owned operators.

The Ministry of Industry and IT (MIIT) also lifted restrictions preventing China Mobile Ltd. from entering the fixed-line broadband market.

However, the ministry said that licenses for LTE FDD operations would be issued only when "conditions are ripe."

The decision to give licenses to China Mobile, China Telecom Corp. Ltd. and China Unicom Ltd. had been widely expected by year-end. (See China Holds Key to LTE TDD.)

China Mobile, which has been the most aggressive in rolling out 4G, will almost certainly be the first to offer commercial service. It is midway through a 100-city LTE TDD rollout and is already selling "trial" data services in several cities.

In addition, China Mobile is believed to have struck a deal with Apple Inc. (Nasdaq: AAPL) to offer the iPhone on its network, according to The Wall Street Journal.

In contrast, China Telecom and China Unicom, which are both planning hybrid TDD-FDD deployments, are unlikely to start commercial service in the first half of 2014.

The issue of new licenses and spectrum to incumbent operators without any selection process, while rare in North America and Western Europe, is not unusual in East Asian markets.

What was unusual was the issuing by the Ministry of Industry and Information Technology (MIIT) of a document defending its decision.

In response to the question of why only TDD licences were issued, the ministry said that this was because the operators had only applied for TDD permits. It denied that this was a breach of WTO "technology neutrality" rules and said it would approve issue FDD licenses only when "conditions are ripe" following FDD network trials and "system verification" of hybrid LTE FDD and TDD.

Yet earlier this year the heads of both China Unicom and China Telecom spoke publicly about their plans to deploy FDD, changing their minds after the MIIT officials had made it clear that only TDD licenses would initially be on offer.

Reportedly, the ministry rejected China Telecom's initial 4G network rollout plan because it did not contain enough TDD equipment.

As well as the licenses, the MIIT also handed out spectrum. As had been expected, the lion's share goes to China Mobile. It gets 130MHz, or nearly two-thirds of the frequencies handed out. China Unicom and China Telecom both get 40MHz each, as follows:

• China Mobile: 1880-1900 MHz, 2320-2370 MHz, 2575-2635 MHz
• China Unicom: 2300-2320 MHz, 2555-2575 MHz
• China Telecom: 2370-2390 MHz, 2635-2655 MHz

Separately, the MIIT cancelled the ban on China Mobile entering the fixed-line broadband market. The restriction had been in place since the operator acquired Tietong Telecom, the failing ex-Ministry of Railways service provider. (See Major Carrier Shakeup Expected in China.)

— Robert Clark, contributing editor, special to Light Reading