China’s Ministry of Industry and Information Technology yesterday approved requests from China Telecom and China Unicom to extend their hybrid LTE network trials to an additional 24 cities, including Beijing and Guangzhou.
The operators now have licences to operate FDD-LTE services in 40 cities, with an estimated combined population of 400 million to 500 million. The two companies first received approval for the hybrid TDD/FDD trial in 16 cities in June.
The expanded trial means the number 2 and 3 players can move aggressively to build out their 4G networks and push to gain ground on market leader China Mobile, which had 14 million 4G connections at the end of Q2, according to GSMA Intelligence.
China Mobile is less interested in an FDD licence since its 3G network is based on TD-SCDMA, which has simplified its migration to TD-LTE.
The first 4G licences approved by the government last December were for TD-LTE. This effectively gave China Mobile an advantage over its rivals, which preferred the more popular FDD-LTE.
The opportunity to expand its coverage is particularly significant for China Telecom, whose 3G network is slower than the other two operators’. The company can now accelerate its investment in its 4G network.
The company’s CAPEX budget for the full year is CNY80.3 billion ($13 billion), but it spent less than 30 per cent in the first half of the year. H1 CAPEX fell sharply (from CNY33 million to CNY23 billion) from a year ago as it was holding off deploying LTE base stations until it received the licence for FDD, which is more compatible with its existing 3G network (CDMA 1x/EV-DO).
Because the trial permits have come later than expected, China Telecom has reduced its target of adding 80,000 4G base stations this year from the previous 140,000 target stated earlier in the year. It rolled out only 26,000 4G base stations in H1.
Meanwhile, China Unicom has plans to build out 100,000 4G base station in H2.
The MIIT is expected to approve full commercial FDD LTE licences early next year.