China Mobile Fast-Tracks TD-LTE

China Mobile Ltd. (NYSE: CHL), recognizing that future growth of its 3G services is not yet certain, is looking to secure its future with a nearly parallel development of Long Term Evolution (LTE) capabilities, according to its annual report filed with the Securities and Exchange Commission (SEC) recently.

Notable amongst the usual "ifs" and "buts" warning of natural disasters and currency deviations, China Mobile's filing highlights that TD-SCDMA is unproven as a commercial technology. It also says the ecosystem surrounding the technology is immature in comparison with those for the 3G CDMA and W-CDMA technologies used by China Telecom Corp. Ltd. (NYSE: CHA) and China Unicom Ltd. (NYSE: CHU) respectively.

As a result, the filing states, China Mobile has "encountered and may continue to encounter challenges in the deployment of our 3G services, which could have a material adverse effect on our financial condition and results of operations as well as our revenues and profitability."

High on the list of limitations TD-SCDMA imposes are the availability, functionality, and price of terminals, and the support for international roaming. The latter particularly impacts China Mobile's high-end and business customers.

China Mobile remains committed to TD-SCDMA, but at the same time it's going all out to develop converged time division duplex (TDD) and frequency division duplex (FDD) products for LTE, the proto-4G wireless technology set to be deployed by mobile operators worldwide.

Developing a simultaneous LTE strategy will enable China Mobile to limit the time it is dependent on TD-SCDMA, and also help it counter the constraints it's currently experiencing as a result of the TD-SCDMA sector's limited ecosystem.

China Mobile chairman and CEO Wang Jianzhou has previously stated that the carrier will look to launch TD-LTE (a TDD version of LTE) in 2010. The Chinese operator is part of a converged FDD/TDD development program with Vodafone Group plc (NYSE: VOD) and Verizon Wireless , both of which will likely to be at the forefront of FD-LTE (an FDD version) deployments.

And the carrier's trial schedule for TD-LTE is already underway. An industry insider close to China Mobile's TD-LTE trials, who wished to remain anonymous, tells Light Reading that the first phase of testing, with a single prototype device in a single cell, has been successfully completed, achieving speeds of up to 61Mbit/s for a single radio channel.

All the usual technology supplier suspects are believed to have been involved, including infrastructure vendors Alcatel-Lucent (NYSE: ALU), Datang Telecom Technology Co. Ltd. , Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Nokia Networks , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763). They also took part in TD-LTE demonstrations with China Mobile at the Mobile World Congress in February. (See TD-LTE Heads For MWC.)

The next phase of testing is set to start in late July or early August, will involve multiple protype devices, and include cell-to-cell handover attempts and some interoperability testing. This will be completed by the end of the year and will be followed by field trials beginning early in 2010.

The source adds that China is on course to be "amongst the first 10 countries to launch [commercial] LTE."

— Catherine Haslam, Asia Editor, Light Reading

helenjrobins 12/5/2012 | 4:28:19 PM
re: China Mobile Fast-Tracks TD-LTE

It was a strange decision, but I don't think that they're aims were to limit the market as you put it. Rather I saw on tv that they were just doing they're best to carve out some kind of future for the business lest it collapse completely.

doffinee 12/5/2012 | 4:01:47 PM
re: China Mobile Fast-Tracks TD-LTE Tuns of dollars already spent on TD-SCDMA. What a funny decision made by the goverment...
opticalwatcher 12/5/2012 | 4:01:44 PM
re: China Mobile Fast-Tracks TD-LTE

Let me see if I understand this correctly. China developed their own offshoot of TD-CDMA called TD-SCDMA and found out, surprise!, that manufacturers didn't want to support this limited market and that the phones wouldn't work well anywhere else.

So as a solution to this, they are developing an offshoot of LTE, creating yet another limited market that no one will want to support, and effectively further limiting the market and support of TD-SCDMA.

Will China's TD-LTE basestations, phones, and data modems work with FD-LTE?

Catherine Haslam 12/5/2012 | 4:01:41 PM
re: China Mobile Fast-Tracks TD-LTE China developed TD-SCDMA for two main reasons. Firstly, to avoid the Qualcomm IPR royalties associated with W-CDMA and secondly to promote Chinese vendors on the global stage. However, it took so long getting to market that it pretty much missed the 3G window for global take up. And at least Huawei and ZTE have done pretty well anyway.
That has left China Mobile as the sole TD-SCDMA operator, although others, including many of Europe's operators have TD spectrum they would like to use at some stage.
To answer your question about TD/FD LTE interoperability, this is what China Mobile is pushing for. If equipment is developed to support both flavors from the outset, China Mobile will benefit from being part of the mainstream. At the same time, the early adopters, such as Verizon, Telia Sonera and NTT Docomo, will benefit from China's scale. That will help speed device development in particular.
If the two are not developed together, then China Mobile will be following a similar path again as FDD is the flavor of choice for most operators at the moment.
As for whether TD-SCDMA is a big waste, I'll leave that to you to make up your mind. A market with 650 million plus users and over a billion people has to be worth something though, even if it's not what the Chinese government had hoped for.
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