4G: More Positive Signals 中国正在加快脚步迈向4G网络
More positive signals are emerging on China’s long march to 4G, with both the telecoms regulator and embattled networking equipment provider ZTE (HKEx: 763; Shenzhen: 000063) providing the latest signs that China could award 4G licenses much sooner than many previously thought. These new signals seem to be the latest in an accelerating trend, as China’s slow-moving telecoms regulator finally responds to pressure from industry heavyweight China Mobile (HKEx: 941; NYSE: CHL) to award 4G licenses sooner rather than later. Perhaps more importantly, the regulator could finally be realizing that its constant lateness in awarding new technology licenses is putting China’s 3 telcos at a distinct disadvantage to their global rivals, forcing the trio of China Mobile, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) to constantly play catch-up to their more aggressive peers around the world.
Let’s have a quick look at the latest news bits, starting with word that China’s telecoms regulator, the Ministry of Industry and Information Technology (MIIT), has taken the bold step of allocating spectrum for TD-LTE, the homegrown 4G standard being developed by China Mobile. (English article; Chinese article) If some readers detect a little sarcasm in my use of the word “bold” to describe the MIIT’s latest move, it’s because I find it somewhat ridiculous that the regulator has taken so long to take this otherwise simple but necessary step for a 4G roll-out.
Global telecoms watchers are aware that most other countries issued 4G licenses long ago, and China remains one of the few major global markets that has yet to take such a step. The MIIT had previously indicated that the spectrum allocation would be coming soon (previous post), and the fact that it has followed through on its plan means it’s probably coming under some pressure from higher leaders in Beijing to quicken the pace of the country’s 4G roll-out.
Meantime, the other interesting news bit has ZTE announcing new contracts to help China Mobile build its 4G TD-LTE network, which is still officially in its trial phase. (company announcement) ZTE’s announcement seems to involve mostly expansion of trial networks in a small number of cities such as Shenzhen and Hangzhou, which have been part of China Mobile’s previously announced TD-LTE trials that began late last year.
But the latest announcement also includes construction of networks in the cities of Shenyang and Tianjin, which mark a major expansion into a new group of second-tier cities beyond the original group. The expansion will bring China Mobile’s TD-LTE network to a total of 13 cities, or nearly double the size of the original trial network. The timing of ZTE’s announcement is no doubt at least partly designed to bring some positive buzz to the company, following its weekend disclosure that it will post a massive loss in the third quarter of this year. (previous post) ZTE’s home China market will clearly be one of the few bright spots for the company over next 2 quarters, as all 3 China telcos start to build up their trial 4G networks in anticipation of the granting of formal licenses for commercial service.
With all these signs of accelerating momentum, it really does look like we could see formal 4G licenses awarded in the first quarter of 2013. If that happens, look for China Mobile to roll out a commercial product almost immediately, and for Unicom and China Telecom to quickly start building their networks and launch commercial service by the end of the year. That development would provide a big boost for networking equipment suppliers like ZTE, Huawei and Ericsson (Stockholm: ERICb), which will build the networks. It should also come as a welcome development for Chinese consumers, who have been stuck with lackluster 3G products for much of the last 3 years as the rest of the world moves on to 4G.
Bottom line: The MIIT’s assignment of spectrum for TD-LTE is the latest signal that 4G licenses could be coming soon, possibly as early as the first quarter of 2013.
Related postings 相关文章:
