4G Trial Expansion Looms, But Real Networks Still Years Off

One of my well-placed sources informs me that China Mobile (NYSE: CHL; HKEx: 941) will announce a major expansion of its 4G trials shortly after the National People’s Congress wraps up in Beijing in a week or two. China Mobile Chairman Wang Jianzhou has been talking openly at the NPC about the expansion of trials to seven major cities in the near future, and each of the big equipment suppliers — Huawei, ZTE (HKEx: 763), Nokia Siemens Networks, Ericsson (Stockholm: ERCb; Nasdaq: ERIC) and Alcatel Lucent (Paris: ALUA) is likely to get one city to showcase what it can do with TD-LTE, the homegrown 4G standard that China Mobile is developing. With early signs that China may actually be able to export this standard, the stakes are surely higher here than they are with TD-LTE’s predecessor, the dog known as TD-SCDMA. Still, given the fact that most of China is just getting started with 3G after years of delays, I don’t see the telecoms regulator issuing 4G licenses anytime soon, perhaps late 2012 at the very earliest. China Mobile’s earnest pressing ahead with 4G trials, at least in my mind, is probably more wishful thinking, as the company loses some of its colossal market share in the 3G space to smaller rivals China Unicom (HKEx: 763; NYSE: CHU) and China Telecom (HKEx: 762; NYSE: CHT).

VERDICT: China won’t give out 4G licenses until late 2012 at earliest, and in the meantime China Mobile will continue to lose market share due to its inferior 3G technology