Two thoughts on the issuance of 4G licenses by the Ministry of Industry and Information Technology

The 4G license has finally been approved.

　　On December 4, the Ministry of Industry and Information Technology officially issued 4G licenses to the three major operators. China Mobile, China Unicom, and China Telecom were the first to obtain TD-LTE network operating licenses, while LTE FDD licenses have not yet been issued.

　　In addition, the Ministry of Industry and Information Technology also lifted restrictions on China Mobile's fixed-line business, and China Mobile's listed company was approved to operate fixed-line communications business. Before this, China Mobile could only develop fixed-line business through China Railway Communications.

　　At this point, the long-rumored 4G licenses have finally been issued, and the curtain of my country's 4G era has officially opened. This is a huge opportunity for the three major telecom operators, many communication equipment manufacturers, and mobile terminal manufacturers. Every upgrade and transformation can bring opportunities to change the industry landscape.

　　The three major operators have issued their own announcements regarding the issuance of 4G TD-LTE network licenses. China Mobile has the most positive attitude, stating that it will "go all out to promote the construction and operation of the fourth-generation mobile communication network." Judging from the statements of China Unicom and China Telecom, their enthusiasm for promoting 4G will not reach its peak until the subsequent issuance of LTE FDD network licenses.

　　Major communication equipment manufacturers such as Ericsson, Huawei, and ZTE, and chip manufacturer Qualcomm also expressed their support for China's 4G licensing. A feast for the industry chain is about to begin.

　　The whole story of TD-LTE launch

　　Before the official issuance of the 4G licenses, the industry had speculated that China Telecom and China Unicom would obtain both TD-LTE and LTE FDD licenses. However, in the end, the Ministry of Industry and Information Technology only issued TD-LTE licenses in the first batch.

　　According to the announcement released by the Ministry of Industry and Information Technology: The Ministry of Industry and Information Technology, in line with the principles of "objectivity, timeliness, transparency and non-discrimination", reviewed the company's application in accordance with the "Telecommunications Business License Management Measures" and issued "LTE/Fourth Generation Digital Cellular Mobile Communications Business (TD-LTE)" operating licenses to China Mobile Communications Group Co., Ltd., China Telecom Group Co., Ltd. and China Unicom Group Co., Ltd. on December 4, 2013.

　　Regarding the question of only issuing TD-LTE licenses but not LTE FDD licenses at the same time, the relevant person in charge of the Ministry of Industry and Information Technology explained that this is because the three operators in my country have already carried out TD-LTE large-scale network experiments and all three operators have submitted applications for TD-LTE licenses in the first batch.

　　"TD-LTE licenses are issued based on applications from telecom operators, taking into account a variety of factors such as the development of LTE technology and the maturity of the industry." The Ministry of Industry and Information Technology said that the perfection of TD-LTE technology and the maturity of industry development have met the conditions for large-scale commercial use.

　　According to the reporter, among the three operators, except for China Mobile which must go all out to promote TD-LTE, China Unicom and China Telecom both focus their main 4G efforts on LTE FDD.

　　From a global perspective, of the two LTE standards, FDD (Frequency Division Duplexing) is developing faster than the China-dominated TDD (Time Division Duplexing, also known as TD-LTE). The former is also relatively more mature, with relatively more complete support for equipment and terminals.

　　Therefore, although all three operators have obtained TD-LTE licenses, the industry has long speculated that China Telecom and China Unicom will only build a small number of TD-LTE base stations and focus on building LTE FDD.

　　This is indeed the case. According to a reporter from 21st Century Business Herald, China Unicom started to deploy LTE networks in a southern province in October this year. "In the early stage, it mainly covered some core areas such as stations and business districts, mainly FDD, and only a small part was TD-LTE," an insider told the reporter.

　　Obviously, the MIIT will issue LTE FDD licenses to China Telecom and China Unicom in the future. Currently, the MIIT has approved operators to conduct LTE FDD network technology trials and will officially issue licenses "after conditions are ripe".

　　In this regard, the relevant person in charge of the Ministry of Industry and Information Technology also said that the mutual integration and development of TD-LTE and LTE FDD has become a trend in the global mobile communications industry. "At present, my country has planned radio frequencies for TDD and FDD. In order to make full use of frequency resources and facilitate users to use mobile communications services at home and abroad, my country needs to coordinate the development of TD-LTE and LTE FDD."

　　However, for Telecom, its 4G, 3G, and 2G hybrid networking in the future will face more complex situations than the other two operators, especially with higher requirements for terminals.

　　China Mobile's previous requirement for 4G terminals to support "5 modes and 10 frequencies" has already doubled the pressure on related chip and terminal manufacturers. However, in the future, China Telecom's 4G terminals will require 6-mode chip support for TD-LTE/LTE FDD/CDMA/TD-SCDMA/WCDMA/GSM.

　　The Ministry of Industry and Information Technology said that China Telecom is currently focusing on solving the network interoperability issues of CDMA and TD-LTE that are suitable for its development needs, and it is expected that China Telecom's multi-mode mobile phones will be commercially available in 2014. Before that, China Telecom will mainly develop multi-mode data card business.

　　Internet construction boom boosts economy

　　Both domestic and international communication manufacturers have long coveted China's domestic 4G market. Because China has the largest population and a large land area, there will be a huge demand for 4G network coverage in the future.

　　According to Ericsson's latest "Mobile Market Report", by 2019, China will become the world's largest 4G LTE market, and the number of 4G LTE users will reach more than 700 million.

　　From a global perspective, China's 4G network construction has lagged behind, but not as much as in the 3G era. According to statistics from the Global Mobile Suppliers Association (GSA), as of September this year, there were 213 4G commercial networks in the world. GSA predicts that by the end of 2013, there will be 260 LTE commercial networks in the world.

　　In terms of the number of users, as of the third quarter of 2013, the number of 4G users worldwide reached 126 million. It is expected that by 2016, the number of 4G users worldwide will exceed 1 billion.

　　In this round of 4G boom, domestic operators have already started to deploy a series of experimental networks before the Ministry of Industry and Information Technology officially issued licenses. Among them, China Mobile is the most active. According to China Mobile's 2013 plan, China Mobile's 4G network will cover more than 100 cities and it is expected to build more than 200,000 sites.

　　In addition, China Telecom has also launched a bidding for 4G network equipment, including LTE FDD and TD-LTE base stations, with a planned investment of 10 billion yuan. China Unicom's LTE network construction will also begin in many cities across the country in the second half of this year.

　　Institutions generally expect that my country's 4G network construction boom will last for three years. According to forecast data from CITIC Securities, my country's 4G equipment investment in 2013-2015 was 41.1 billion yuan, 47.5 billion yuan, and 50 billion yuan, with growth rates of 513%, 16%, and 5%, respectively.

　　Among them, the total investment in main equipment, transmission investment, base station supporting facilities, and power supply in the three years is about 61.9 billion, 10.7 billion, 47.9 billion, and 17.9 billion respectively. In 2013 alone, the investment growth rates of main equipment, RF components, network optimization coverage, and transmission markets will reach 523%, 573%, 613%, and 322% respectively.

　　In response to the huge market that is about to open up in China, Ericsson President and CEO Hans Vestberg immediately sent a video to express his congratulations on China's 4G licensing, and said that Ericsson is jointly deploying 4G networks with China Mobile, and will work with the three major operators to build 4G in the future.

　　Local manufacturers ZTE and Huawei have also stated that they will fully support my country's 4G network construction and use their overseas experience to provide better networks for Chinese consumers.

　　According to statistics from the Ministry of Industry and Information Technology, after my country issued 3G licenses in 2009, in the first three years of development, it directly drove investment of 455.6 billion yuan and indirectly drove investment of 2.23 trillion yuan; it directly drove terminal business consumption of 355.8 billion yuan and indirectly drove social consumption of 303.3 billion yuan; it directly drove GDP growth of 211 billion yuan and indirectly drove GDP growth of 744 billion yuan.

　　It is expected that this round of 4G investment will have a more significant effect in boosting economic growth.

　　China Mobile obtains fixed-line network qualification

　　Along with the issuance of 4G licenses, China Mobile also announced a good news: the Ministry of Industry and Information Technology has also lifted restrictions on China Mobile's fixed-line business. China Mobile will become a true full-network operator. Previously, China Mobile could only carry out fixed-line business through China Railway Communications.

　　According to China Mobile's announcement: The Ministry of Industry and Information Technology approved China Mobile Communications Group Corporation to authorize the fixed communications business to China Mobile Limited (i.e. China Mobile's Hong Kong listed company) for operation.

　　The reason why the Ministry of Industry and Information Technology previously set restrictions on China Mobile was that in 2009, in order to encourage China Mobile Limited to make every effort to promote the development of TD-SCDMA third-generation mobile communications business, China Mobile Group Corporation obtained a full business operation license including fixed communications business, and authorized its wholly-owned subsidiary China Tietong Corporation to operate fixed communications business except TD-SCDMA.

　　The Ministry of Industry and Information Technology explained that China Mobile's TD-SCDMA is currently developing well, the Broadband China strategy is being pushed forward, and the integrated development of fixed and mobile has become a global telecommunications development trend.

　　At the request of China Mobile Group, the Ministry of Industry and Information Technology approved the authorization of fixed-line communication business to China Mobile Co., Ltd. At the same time, it is also conducive to creating a market environment of integrated development and full business competition.

　　Industry analysts believe that the reason why the Ministry of Industry and Information Technology lifted the restrictions on China Mobile's fixed-line network operation at this point in time may be a "compensation" for China Mobile's development of TD-LTE. This is because according to the plan, China Telecom and China Unicom will be approved to operate LTE FDD at the same time in the future, while China Mobile can only develop TD-LTE for the time being.

　　The Ministry of Industry and Information Technology talked about

        why it only issued TD-LTE licenses this time and would issue FDD licenses when conditions are ripe. While issuing 4G licenses to the three major operators today, the Ministry of Industry and Information Technology issued a relevant explanation as to why it only issued TD-LTE licenses to the three operators, saying that LTE FDD licenses will also be issued in the future, but the LTE FDD licenses will be issued only when conditions are ripe.

　　Comply with the principle of objectivity and neutrality

　　According to the announcement of the Ministry of Industry and Information Technology, my country will issue 4G licenses, and three operators will simultaneously obtain the first batch of 4G licenses, which are TD-LTE standards. In this regard, the Ministry of Industry and Information Technology stated that recently, China Mobile, China Telecom, and China Unicom submitted TD-LTE license applications to the Ministry, and the Ministry issued TD-LTE licenses to the three companies in accordance with legal procedures.

　　The Ministry of Industry and Information Technology believes that the issuance of this license follows the principles of "objectivity, timeliness, transparency and non-discrimination" and that the issuance of the license complies with international rules.

　　LTE FDD licenses will be issued when conditions are ripe

　　China Telecom and China Unicom both announced this year that they would adopt the integrated networking mode of TD-LTE and LTE-FDD. Why were TD-LTE licenses only issued to these two companies? The Ministry of Industry and Information Technology stated that TD-LTE licenses were issued based on applications from telecom operators, taking into account a variety of factors such as the development of LTE technology and the maturity of the industry.

　　Previously, the Ministry of Industry and Information Technology received relevant materials from three operators applying for TD-LTE licenses, and the three operators have all carried out TD-LTE large-scale network trials. The maturity of TD-LTE technology and industrial development has met the conditions for large-scale commercial use.

　　The Ministry of Industry and Information Technology stated that it will approve relevant companies to conduct LTE FDD network technology trials based on their applications and in accordance with relevant legal procedures, systematically verify the development model of LTE FDD and TD-LTE hybrid networking, and will issue LTE FDD licenses when conditions are ripe.

　　Coordinated development of TD-LTE and LTE FDD

　　Some people believe that in order to ensure network information security, it is recommended that only one 4G license be issued for TD-LTE, which is dominated by my country. Why do we need to conduct LTE FDD trials and issue LTE FDD licenses in the future? In this regard, the Ministry of Industry and Information Technology stated that TD-LTE and LTE FDD are both international standards for the new generation of mobile communications. The mutual integration and common development of TD-LTE and LTE FDD has become the trend of the future global mobile communications industry. At present, there are 10 commercial dual-mode networks of TD-LTE and LTE FDD in the world.

　　The Ministry of Industry and Information Technology said that at present, my country has planned radio frequencies for TDD and FDD standards. In order to make full use of frequency resources and facilitate users to use mobile communication services both at home and abroad, my country needs to coordinate the development of TD-LTE and LTE FDD.

　　In addition, the Ministry of Industry and Information Technology stated, "Our ministry will also study relevant measures to strengthen network information security, and actively carry out work such as ensuring my country's network information security and protecting personal information."