One-man show in the 4G era: China Mobile’s misaligned competition method

　　No LTE FDD?

　　Maybe, maybe not. At least, it is more likely that there will be no LTE FDD in the first batch.

　　The “delay” in issuing 3G licenses and the “speed” in issuing 4G licenses

　　This story starts from the 3G license era. In January 2009, China issued 3G licenses, and three operators were granted 3G network construction licenses of three different standards. This time was five years later than the industry expected. In addition to the direct factor of completing the restructuring of telecom operators, some industry insiders analyzed that waiting for the maturity of the TD-SCDMA standard with China's independent intellectual property rights was also one of the reasons why the 3G licenses were delayed until 2009.

　　Finally, the industry big brother China Mobile (Weibo), which remains as powerful as ever after the reorganization, took on the responsibility of building a "domestic" 3G network, while its two smaller brothers China Unicom (Weibo) and China Telecom (Weibo) obtained the more mature international WCDMA and CDMA2000 licenses respectively.

　　The domestically produced TD-SCDMA standard, which is theoretically more advanced, lags behind the other two in terms of maturity and terminals. This has resulted in a "contrasting" growth in the 3G network user penetration rate of the three major operators from the issuance of licenses to today - the 3G user penetration rate of China Unicom (38.2%) and China Telecom (44%) is much higher than that of China Mobile (18.63%).

　　At present, China Mobile is making every effort to test and deploy TD-LTE 4G network. According to internal information, its 3G network construction is no longer the focus of its work. An insider of the operator said that China Mobile was probably not optimistic about the performance of TD-SCDMA when it launched the 3G network. In other words, it was "forced" for the sake of national strategy. But China Mobile was not content with this. Any technology has a gradual maturity process, so shortening the 3G cycle and quickly transitioning to the 4G era may be the strategy formulated by China Mobile in the 3G era.

　　The tangle between China Unicom and China Telecom

　　In the 3G era, three licenses were issued at the same time, and China Unicom and China Telecom had an advantage in network standards. The two operators also hoped to narrow the gap with the big brother China Mobile in the 3G era. The longer the 3G era lasts, the more beneficial it will be for China Unicom and China Telecom.

　　But the arrival of 4G is unstoppable. China Unicom and China Telecom have made preparations and explorations in the 4G standard based on LTE FDD technology, and look forward to relying on more mature international standards to maintain their "technological leadership" over TD-LTE in the 4G era.

　　However, not everything goes as planned. In the 4G era, TD-LTE's technical maturity disadvantage over LTE FDD will be smaller than in the 3G era, and may even be narrowed to a level that does not affect user perception. This is very likely to happen.

　　What is even more troubling for China Unicom and China Telecom is that the first batch of 4G licenses issued may not include the LTE FDD they have carefully prepared. According to some current rumors, it is very likely that the Ministry of Industry and Information Technology will give priority to issuing TD-LTE licenses this year.

　　In order to support the domestic 4G standard, it is not impossible to gain a certain period of first-mover advantage for TD-LTE by issuing licenses. What China Unicom and China Telecom have to face is not only that LTE FDD cannot be commercially used at the beginning of 4G, but more importantly, how to deal with the TD-LTE licenses that may be given to them.

　　Misaligned competition between 4G and 3G

　　This is a difficult question. Obviously, it is not in the best interests of China Unicom and China Telecom to fully develop 4G networks based on the TD-LTE standard. China Telecom's proposal to "rent a network" and China Unicom's proposal to "build a network" are actually more like an expression of attitude, and they are also leaving a way out for themselves if the LTE FDD license is delayed.

　　At present, the maximum speed of the evolved version of China Unicom's 3G network, HSDPA+, has reached 42Mbps, nearly three times higher than the 14.4Mbps in the early stage of commercial use. The results of China Mobile's 4G test network in the city, outdoor and road tests are basically maintained between 30Mbps and 60Mbps, which is a significant improvement over China Mobile's own 3G network, but there is no revolutionary improvement compared with the maximum speed of China Unicom's HSPA+. Therefore, in the early stage of 4G commercial use, if China Unicom cannot obtain the LTE FDD license in the first place, it is not without any ability to fight back in the competition with China Mobile's 4G through its existing 3G network. It's just that China Unicom's original network advantage in the 3G era will be offset by China Mobile's TD-LTE through the misaligned lead.

　　Let's look at China Telecom. Since CDMA's 3G network does not have the high speed of WCDMA in terms of technology, China Telecom has adopted a model of focusing on coverage rather than speed in the process of building its 3G network. At present, China Telecom's 3G coverage is the best in urban and rural areas, indoors and outdoors, and even on high-speed railways. In the 4G era, China Telecom can still use its high coverage advantage to compete with China Mobile and China Unicom's high speed.

　　Another possible option for China Telecom is to lease China Mobile's 4G network in core cities to improve the speed requirements of high-end users, and then combine it with the coverage advantages of CDMA2000 in third- and fourth-tier cities and rural suburbs to form a differentiated market strategy and wait for the issuance of LTE FDD licenses.

　　If China Unicom and China Telecom are not enthusiastic about TD, and the LTE FDD license is at least one year later than TD, a misaligned competition is likely to form among China's three major operators - China Mobile's 4G network against China Unicom and China Telecom's respective 3G networks.

　　Of course, there is another possibility for the story to develop, which is that TD-LTE and LTE FDD licenses are issued at the same time. Everyone continues to return to the competitive environment of the 3G commercial era. This is what China Unicom and China Telecom hope for the most, but what China Mobile does not want to see.

　　In fact, all competition ultimately depends on strength and service. The question that industry insiders are most concerned about is: Is TD-LTE really mature?