Telecom Lead Asia: China Mobile’s 4G launch on the TD-LTE network will boost Bharti Airtel and Reliance Jio Infocomm in India.
The world’s largest telecom operator – based on subscriber base – will conduct customer trial for 4G services in Shanghai next month.
The company, which has around 900 million telecom subscribers, will invite 5,000 users to test the TD-LTE service using mobile phones and data cards.
China Mobile’s Shanghai branch has rolled out 1,000 base stations to cover the inner ring region in the city and plans to expand the TD-LTE service to cover the whole city by the end of this year.
The launch is significant for the entire 4G eco-system as the telecom industry is expecting the arrival of cost effective 4G dongles and handsets after China Mobile launching 4G services in China.
The main benefit will be to Reliance Jio Infocomm and Bharti Airtel in India, the second largest telecom market in the world. Both the 4G operators are looking for cost effective handsets to support their 4G expansion plans. At present, Bharti Airtel has 4G presence in more than 4 circles.
Analysts say if China Mobile starts sourcing more handsets, the initiative will assist mobile handset vendors to reduce the price of 4G handsets.
In a March 2013 note, Infonetics said FDD-LTE was the biggest driver for smartphone growth in the final quarter of 2012, with unit growth of 151 percent.
Julien Blin, directing analyst for consumer electronics and mobile broadband at Infonetics Research, said: “TDD-LTE smartphones are also ramping fast, albeit from a much smaller base, despite a temporary dip in growth in the 4th quarter. In 2012, 5 times as many W-CDMA/HSPA smartphones shipped as LTE smartphones. By 2015 we expect LTE smartphones to overtake W-CDMA/HSPA.”
Meanwhile, China Mobile earlier said it would increase capital spending (Capex) to 190.2 billion yuan ($30.6 billion) in 2013 from 127.4 billion yuan a year earlier.
For China Mobile, 4G is a vital tool to increase revenue. In 2012, wireless data traffic business accounted for an increase of 187.6 percent in traffic over last year. China Mobile said voice usage volume reached 4,192.3 billion minutes, up 7.8 percent.
China Mobile’s revenue from wireless data traffic business increased 53.6 percent over last year, contributing to 12.2 percent of the total operating revenue.
Analysts are predicting that China Mobile’s 4G network roll outs will benefit Huawei, ZTE and Samsung. Ericsson, Alcatel-Lucent and Nokia Siemens are also keen to bag more 4G deals in China. Last week, Cisco admitted that it is facing adverse market conditions in China.
In a May 2013 note, Dell’Oro Group said that Ericsson, with a four-quarter trailing revenue share of almost 40 percent in the combined WCDMA/LTEmarket, remained the market share leader in mobile broadband. Huawei and Nokia Siemens Networks maintained their number two and number three rankings in the combined WCDMA/LTE market.
Stefan Pongratz, director of Mobile RAN Research at Dell’Oro Group, said: “If we look at the product mix, the launch of commercial public access small cells in the licensed spectrum continued to be pushed out this quarter, while macro BTSs generated unit growth in Q1 203. We expect the macro BTS segment to reach new record levels in 2013 as Service Providers continue to prioritize LTE coverage and network modernization.”
China Mobile’s 4G will be watched by the entire world. Recently, 4G Americas said 4G will achieve 100 million mark this week. Asia Pacific is set to become a major contributor to the LTE growth.