Recently we wrote about the Chinese government awarding LTE TDD licenses to the three state-owned operators. China Mobile, the largest operator in China, is expected to quickly deploy a 4G network, launching the service in 100 cities by the end of 2013 to make up for their spotty 3G coverage from the previous deployment.
Although China Unicom is a much smaller operator, it has much better 3G coverage, and is more willing to embrace a globally-adopted standard with proven business models and mature ecosystem, LTE FDD. However, there is no word on when the FDD licenses will be made available, and China Unicom had to participate in the TDD spectrum auction in order to compete in the 4G market. It is believed that China Unicom had to agree that 20-30% of 4G network deployment would be in the form of LTE TDD in order to receive the LTE FDD license.
Now that it has the license, what is China Unicom’s 4G network and service strategy likely to be?
- LTE FDD is still likely to be China Unicom’s preference. Assuming that the government will eventually release LTE FDD licenses, China Unicom can start deployment of LTE TDD for mobile broadband only (because subsidies for dongles and MiFis are lower than high-end smartphones).
- When China Unicom’s LTE TDD network is in place, the company can upgrade the existing 3G network to DC-HSPA country-wide at a reasonable cost, to reach download speeds closer to China Mobile’s LTE TDD.
- Once LTE FDD licenses become available, China Unicom can push LTD FDD/TDD network convergence and bring dual-mode LTE FDD/TDD smartphones to the network.
With this approach, China Unicom can continue reaping its 3G investment, put a foot in the 4G market, while still fulfilling its LTE TDD network commitment.
As LTE TDD/FDD convergence is becoming a global trend for its capacity improvement and international roaming purposes, its adoption in China would benefit all involved in the ecosystem. It is likely that LTE FDD licenses will be available in late Q2, and by the end of 2014 China Unicom will have approximately 9.4 million 4G subscribers given that it has 40% penetration in 3G.