The Ministry of Industry and Information Technology formally issued FDD LTE licenses to China Telecom and China Unicom on Friday.
On December 4th of 2013, MIIT officially issued 4G TD-LTE licenses, China Mobile, China Telecom and China Unicom all obtained TD-LTE licenses, which officially announced the beginning of 4G era in China. However, due to the network upgrading issues, China Unicom and China Telecom are more willing to obtain the FDD LTE licenses, that’s why they didn’t carry out large-scale network construction after they obtained the TD-LTE licenses. Take China Unicom for example, it has built only 100,000 4G base stations in last year, which was less than 15% of that of China Mobile.
Prior to this, MIIT has always been using a "toothpaste squeezing" strategy, and issued TD-LTE/FDD LTE hybrid networking pre-commercial operating licenses to China Telecom and China Unicom, allowing them to carry out trials in 16 pilot cities at first, respectively. Then MIIT expanded the trial scope, which increased to 40 cities from August 28th, 2014, by the end of 2014, the TD-LTE/FDDLTE hybrid networking trial cities cumulatively reached 56 for both China Telecom and China Unicom.
Because of the 1-year first mover advantage, China Mobile has developed more than 100 million 4G subscribers, which almost got the entire 4G market; more importantly, as the TD-LTE technology is completely mature, the device cost is reduced to a very low level. But for China Telecom and China Unicom, they were in inferior position in the market competition due to the lack of licenses. According to the operation data of January 2015 revealed by the three major operators, 4G subscribers of China Mobile broke the 100 million mark, however, China Unicom set a new record of low subscribers addition speed and new subscribers also growed slowly in China Telecom.
One officer of MIIT pointed out on the issuance of LTE FDD licenses, the integration and co-development of TD-LTE and LTE FDD has become the trend of telecom industry in the global, mobile communication industry has achieved comprehensive development in China, and the domestic network equipment enterprises and device vendors have adopted TDD/FDD platform in R&D and manufacturing, which formed strong competitiveness in the TD-LTE and LTE FDD fields.
In addition, MIIT will further promote the co-construction and co-sharing work in the three major operators, encourage and guide major operators to set up 4G network by combining renting and building, therefore avoiding repeated construction and waste of resources.