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Entries in China Telecom (17)

Friday
Jun272014

China Telecom, China Unicom get their FDD licences 

China's MIIT today issued China Telecom and China Unicom their long-awaited FDD-LTE licences.

Officially the new permits are 'trial licences' for 16 cities to test out FDD-TDD integration. However, precedent suggests the two operators will face few obstacles in upgrading to full commercial service in the next 12 or so months.

Both Telecom and Unicom have been reluctantly pressed into building out 4G using the government-backed TD standard. The first 4G licences, issued last December, specified TD only.

China Mobile has embraced TD-LTE because of the limited acceptance of its TD-SCDMA 3G system. It claims it will have built out a TD network in 300 cities by year-end.

China Telecom has said it would use TD for no more than 30% of its coverage, and primarily in high-density urban areas.

China Unicom has been the slowest to upgrade to 4G because of its desire to extract more value from its W-CDMA network and did not call its first LTE tender until last December.

The go-ahead for FDD will have no impact on vendor contracts and will probably mean little material change in network rollouts. Both companies are still in the early stage of deploying 4G and will have already developed FDD plans ahead of the licence issue.

Tuesday
Jul302013

Chinese operators get into bed with WeChat

Chinese operators – well, two of them anyway – have bowed to the inevitable and are striking deals with popular messaging service WeChat.

The pathbreaker is China Unicom, which is to announce a partnership in Guangzhou this afternoon.

China Telecom is also said to be prepping a service which would give users 2GB of WeChat and Sina weibo data for just 6 yuan (0.98) a month.

Both partnerships will take place in Guangdong, the wealthy southern province, and have a flavour of ‘suck it and see’ as operators test out the cooperative approach to dealing with OTT.

Missing from the party is China Mobile, which early this year skirmished with Tencent, the company behind WeChat, complaining the service was using up valuable network resources.

Rumours swirled that WeChat would be forced to charge its 300m users but, as this blog pointed out at the time, it was only China Mobile that had a problem, thanks to its under-powered 3G network. Plus it was unlikely that a newly-installed government would make itself so gratuitously unpopular.

The washup of that imbroglio is that the two smaller operators have gone over to the ‘enemy’ while China Mobile is on its own.  

According to Sohu IT, China Unicom is offering WeChat Wo for WeChat data at 15 yuan a month for those already with a minimum 36-yuan monthly package. (Wo is Unicom’s mobile data service.)

WeChat Wo will come with HD photos and HD movies, some free games, and the ability to support Unicom’s Wo payment feature. If all goes well in Guangdong, Unicom is hoping for quick expansion into other southern provinces such as Jiangsu, Zhejiang and Fujian.

For the operator, this is an important ‘ice-breaker’ in forging cooperation with OTT players, a Unicom source told Sohu IT. For Tencent, it is a chance to grow the business with a strong partner with a deep channel. Tencent chief Pony Ma reportedly played a direct role in the negotiations.

Such OTT partnerships are new to mainland China, but they’ve been in the Hong Kong market since last year. Hutchison launched a WhatsApp bundle last September, while PCCW has been selling a WeChat package since February.

Meanwhile, China Mobile is trying to go it alone with messaging app Fetion and Skype-like voice application Jego. Embarrassingly it had to pull Jego from the domestic market just after launch because mobile VoIP is still illegal in China.

Yet this won't trouble China Mobile. It's still working the old playbook, focusing on networks, not apps. At year-end, while Telecom and Unicom are planning their LTE networks, it will be racking up 4G subs.

Thursday
Jul252013

Spooks, spies and backup tape  

Gen. Michael Hayden’s lengthy encounter with the Australian Financial Review last week was unusual in itself.

Despite the appetite for spook-related stories these days, the most widely-reported part of the interview is the claim by the ex-CIA and NSA chief about Huawei's role in Chinese espionage.

What's telling is not the assertion, or the inevitable lack of accompanying hard fact; it's that the assertion itself is adequate.

Hayden tells the interviewer that Huawei “would have” shared its knowledge of foreign telecom systems with Chinese authorities.  Asked if evidence exists that Huawei has engaged in espionage on behalf of China, he replies (emphasis added):

Yes, I have no reason to question the belief that’s the case. That’s my professional judgement. But as the former director of the NSA, I cannot comment on specific instances of espionage or any operational matters.

Thus Huawei’s role as a security threat is reduced to a mere “belief”. Even within 'operational' constraints, if you have a case against someone, you will find a way to express it. And you would certainly put it with more conviction than the phrase above.

But Hayden does us an unintentional favour here by making it clear that Huawei is proscribed not because of what it's done but what it has the potential to do.

Hayden reveals that after retiring from the CIA he even received a pitch from Huawei in its search for Beltway advocates. According to Hayden, Huawei said all the right things: 

But God did not make enough briefing slides on Huawei to convince me that having them involved in our critical communications infrastructure was going to be okay. This is not blind prejudice on my part. This was my considered view based on a four-decade career as an intelligence officer.

He adds:

But frankly, given the overarching national security risks a foreign company helping build your national telecommunications networks creates, the burden of proof is not on us. It is on Huawei.

Leaving aside the ontological challenge of demonstrating that one is not a spy, this is the logic of the national security mindset. It takes a brave politician to challenge it and through the Cold War, the 'war on terror' and now the contest with China, it’s been the prevalent one in Washington.

The rest of world, including the telecom industry, has to live with it.  Telstra and PCCW are surely not the only operators to have signed pledges allowing the FBI access to their cables or to store data for its convenience.

But as this blog has suggested before, this logic makes suspects of all vendors.

In this part of the world, that puts the spotlight on Cisco. According to Ni Guangnan, a professor at the Chinese Academy of Engineers, Cisco provides 70%-80% of the backbone routers, international gateway nodes and super-nodes in the two biggest backbone networks, China Telecom and China Unicom.

In a widely-reported incident last October, Unicom swapped out Cisco routers for Huawei kit in what is said to be the world’s largest cluster node. Because of Cisco’s large installed base and the thousands of Cisco-qualified engineers, we won't see a rush to dump Cisco gear.

The Snowden saga has given China the ability to laugh off US complaints about its online data theft. Now the US national security case, as put by Hayden, is a script that China will faithfully adapt for its own purposes.

So stand by for the continued blocking of foreign telcos, more technology protectionism and the dextrous application of 'national security' to ensure China's networks are increasingly the preserve of the home team. 

Monday
Jul222013

Chinese cellcos shape up for $49b 4G rollout: report

In the wake of the government decision to accelerate 4G licensing, Chinese operators have begun positioning themselves for a network rollout battle worth as much as 300 billion yuan ($49bn).

China Telecom is to launch its first 4G trial next month, while both Telecom and rival Unicom are reported to be planning to start network construction by year-end.

China’s State Council declared ten days ago that it aimed to issue 4G licences by the end of the year.

China Telecom will offer its first 4G service on its trial LTE network during the Asian Youth Games in Nanjing next month. It is official communications sponsor of the event and will deploy at major games venues, tourist spots and hundreds of official games vehicles.

Chairman Wang Xiaochu last month confirmed that the operator, which runs cdma2000 and EV-DO networks, would roll out nationwide with both FDD and TD-LTE flavours of 4G. FDD-LTE will provide broad coverage around the country, while TD-LTE will be used to provide extra capacity in densely-populated urban areas.

Previously both China Telecom and China Unicom had been bearish on 4G, most likely because of the desire to maximise the life of their 3G investments.

By comparison China Mobile has firmly embraced it and in the past 18 months has built trial networks in 13 cities. Last month it called tenders for a national 100-city rollout.

Now both Telecom and Unicom have now stepped up their network investment and rollout plans to bridge the gap, the Economic Information newspaper has reported.

China Telecom will expand its forthcoming LTE trial from four to 31 provinces, and is preparing to call tenders. 

China Unicom, which is expected to rollout exclusively with FDD-LTE, is still at the trial planning stage. However, its initial deployment is expected to be around 31,000 base stations.

China Mobile’s national tender calls for the deployment of 207,000 base stations, but this year is expected to invest 80 billion yuan ($13bn) in 180,000 cell stations.

Analysts say the allocation of licences will likely spark an intense competition for 4G coverage. Each of the three operators will build out approximately 200,000 base stations over the next three years, the Economic Information said, citing “multiple industry sources.”

At an average cost of 500,000 yuan per base station, the direct investment in construction could be as much as 300 billion yuan.

Friday
Jul052013

China Telecom prepping national 4G tender: report

China Telecom is planning to take its TDD/FDD 4G network nationwide later this year.

Although only officially a trial, it will effectively be a pre-commercial network covering 31 provinces, ahead of the expected issue of 4G licences in early 2013.

The operator decided on the expansion at a meeting late last month and will issue a formal tender in Q4, website C114 reported.  Currently it runs a limited trial in Guangdong, Jiangsu and two other provinces.

The decision follows confirmation recently by chairman Wang Xiaochu that it would deploy both FDD and TDD versions of LTE.

It will be almost certainly the world’s largest integrated TDD/FDD network. Market leader China Mobile deploys a converged 4G network in Hong Kong, but across the mainland is building out solely with TD-LTE.

Wang said most of the coverage load will be borne by FDD, with TDD deployed as a supplement in densely-populated urban areas.