China Telecom has selected five vendors -- Alcatel-Lucent Shanghai Bell, Ericsson, Nokia, Huawei and ZTE -- to provide LTE FDD equipment during phase two of its deployment of a hybrid FDD-TDD 4G network, according to local media reports.
Not surprisingly, domestic players Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) appear to have landed more than half of the planned work, according to China's C114.net, with the three other vendors splitting the remainder of the business.
However, China Telecom Corp. Ltd. (NYSE: CHA) has yet to issue a statement on the contract awards and the report from C114.net indicates there could be changes before the deals, which are believed to be relatively modest, are finalized. The equipment is to include cellular basestations and an operations maintenance center, among other elements.
China Telecom is desperate to catch up with market leader China Mobile Ltd. (NYSE: CHL) in the 4G market and seems to have shortlisted the vendors in double-quick time, having kick-started the bidding process in November last year.
As previously reported by Light Reading, China Mobile managed to rack up more than 70 million 4G customers in 2014 and it expects to have captured 150 million by the end of this year. (See Forget 3G: China Mobile Is a 4G King.)
While yet to provide details of 4G adoption, China Telecom had 182 million mobile customers on its books in September, including 113 million 3G subscribers.
It began rolling out 4G services on a trial basis in 16 cities in July and had expanded deployment activities to 41 cities by September. Chinese authorities gave the operator permission to extend trials to another 15 cities in December.
Unfortunately, the government has yet to award full commercial LTE FDD licenses, preventing China Telecom from realizing its full 4G ambitions.
FDD uses paired 4G spectrum, with one block of spectrum used for uplink communications and one for downlink, while TDD relies on a single frequency allocation for both the uplink and the downlink.
Something of a cheerleader for LTE TDD, China Mobile has been relying on the standard to build its huge lead in the country's 4G market, but China Unicom Ltd. (NYSE: CHU) and China Telecom have each developed plans for hybrid 4G networks that make use of both the FDD and TDD variants.
Explaining its decision in a press statement in June 2014, number two player China Unicom said that a hybrid network would be "conducive to better development of the company's mobile broadband business."
Internationally, FDD technology has been the preferred 4G solution, which largely explains why China Telecom and China Unicom want to use it.
Deploying a hybrid network should be less costly than relying solely on LTE TDD and mean the operators can offer a broader range of 4G devices to their customers.
According to Analysys Mason , a hybrid network -- or "One LTE", as the market research company calls the combination of standards -- would give operators more flexibility and allow them to manage network resources more efficiently.
"This is possible by switching dual-mode devices from one network technology to another, matching resources to user data needs," said the analyst firm in a white paper published in October last year. "This means operators can avoid network congestion and maximise users' quality of experience."
— Iain Morris, News Editor, Light Reading