x
4G/3G/WiFi

Chinese Cable Companies Make a Play for LTE

Chinese cable operators are preparing to deploy 700MHz LTE networks, throwing down a challenge to the national telecom regulator and the mobile industry.

Four provincial operators, subsidiaries of the national cable TV company, have called a tender for the supply of LTE as part of what they call an integrated cable, wireless and satellite TV and broadband network. The tender documents show plans to build a two-way wireless access network, with baseband units (BBUs), remote radio units (RRUs) and related equipment and services.

The move has sparked some debate in online forums in China, with most seeing it as a means of getting into the mobile business and at the same time denying telcos valuable spectrum real estate.

The telecom regulator, MIIT, is responsible for cellular spectrum allocation, but the 700MHz airwaves -- the digital dividend freed up from analog TV digitization -- is in the hands of the cable ministry, SAPPRFT. Elsewhere in the world, 700MHz spectrum has been returned to communications regulators or auctioned off, but Chinese authorities do not auction spectrum and various spectrum-holding agencies -- including telecom, TV, military and other bodies -- have traditionally administered it in their own ways.

What makes it worse is that the telecom and cable ministries are in a continual feud. For almost a decade, plans to bolster competition in the broadband and TV sectors were held up, with each unwilling to open up to the other. Only in the last 18 months, following repeated edicts from Beijing, has a national cable company been established to deliver broadband.


Want to know more about 4G LTE? Check out our dedicated 4G LTE content channel
here on Light Reading.


For vendors, the move is a potential goldmine, but for the MIIT it could be a landmine. The regulator cannot stop the cable companies from making use of the 700MHz frequencies even if it has not approved the move. Indeed, the Chinese market has a history of operators rolling out mobile networks without regulatory permission and daring the regulator to shut them down.

The MIIT does have the power to prevent the new LTE network from interconnecting with the existing telco networks, but this would run against government plans to get next-generation broadband deployed as widely and quickly as possible.

In MIIT's favor is that cable companies lack the heft to roll out large-scale networks -- in 2013, cable revenues totaled just 76 billion yuan ($11.6 billion), while telcos generated as much as RMB1.16 trillion ($177 billion) in sales.

What's more, broadband is key to the government's ambitious Internet plus plan, which is at the core of the economic modernization program. Ultimately, the MIIT is likely to persuade government leaders that 700MHz spectrum is far too valuable to be left in the hands of the undersized cable players. But that will take time.

One compromise suggested by telecom website C114, which reported the story, could be to level the mobile playing field through allocation of 700MHz licenses. The fresh spectrum, and even an alliance with the cable operators, could aid China Telecom Corp. Ltd. (NYSE: CHA) and China Unicom Ltd. (NYSE: CHU) in their lopsided contest against China Mobile Communications Corp.

— Robert Clark, contributing editor, special to Light Reading

Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE