China Mobile Tries 4G Back Door in Shenzhen 中国移动试图绕过监管机构于深圳秘密规划4G网络
China Mobile (HKEx: 941; NYSE: CHL), keen to launch its 4G service sooner rather than later, is embarking on a major wi-fi initiative in the southern boomtown of Shenzhen, in what looks like an attempt to circumvent the telecoms regulator. According to a domestic media report, China’s dominant wireless carrier has signed an agreement with Shenzhen that will see it spend 6 billion yuan, or nearly $1 billion, over the next 3 years to create a wi-fi network blanketing the city using its 2G, 3G and 4G networks. To me this looks like a clever way for China Mobile to quietly commercialize its 4G service, based on a homegrown technology called TD-LTE, which is currently in the second stage of trials in 6 Chinese cities, including Shenzhen. China’s telecoms regulator only awarded 3G licenses 2 years ago, and it is unlikely to award 4G licenses for at least another couple of years as it gives the nation’s 3 telcos time to recoup their 3G investments, which have totaled around $50 billion to date. As part of the 3G licensing process, China Mobile was required to build a network based on a homegrown technology, called TD-SCDMA, which has suffered from numerous problems and tepid support from handset and networking equipment makers. Accordingly, it has moved aggressively ahead with trials based on the more promising TD-LTE 4G technology, even as it rapidly loses share in the 3G space to rivals China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA). This “wireless city” initiative in Shenzhen could be followed by similar initiatives in the other 5 TD-LTE trial cities, including Shanghai and Guangzhou, effectively allowing China Mobile to sign up millions of 4G data users even as its service remains in the trial stages. The 2 main risks to this strategy are: 1) that TD-LTE has lots of problems, which looks likely, causing consumers to shun the service; and 2) that the regulator realizes what China Mobile is trying to do and orders it to halt its wireless city plans. Either way, I have to applaud China Mobile for its creative approach, even though I suspect this initiative will ultimately run into lots of problems.
Bottom line: China Mobile’s “wireless city” wi-fi initiative in Shenzhen looks like a creative effort to bypass regulators in commercializing its 4G network, but is likely to fall flat.
Related postings 相关文章:
◙ China Telecoms Faces Power Struggle, Half-Baked 4G 中国电信行业遭遇政府监管权利斗争
◙ TD-LTE Hits First Delay, More to Come? TD-LTE技术首次延期 未来还会更多？
◙ China Mobile Shuffle: Sea Change Coming? 中移动高层变动或引发重大变化？
