All three China operators to be awarded TD-LTE licences

Speculation over China 4G licensing continues to run hot. The most likely scenario is that China Mobile will be issued with its licence first, and not until toward the end of the year (zh) when its network is  commercial-ready.

But, according to one widely-reposted report Tuesday (zh), all three operators are to be awarded TD-LTE licences. If they wish to build out FDD-LTE networks, they will have to apply for a separate licence.

The obvious impact of this scenario, if true, would be to give the home-grown technology - and China Mobile - a head start.  But it may perhaps be designed also to put pressure on China Telecom, the smallest mobile player. 

Whereas W-CDMA operators China Unicom clearly plans to upgrade to FDD-LTE, China Telecom, which runs an EV-DO network, is pressured by the enormous 4G capital cost and the  deeper pockets of its rivals.

Speaking at the company's annual results announcement in March, China Telecom CEO Wang Xiaochu expressed a preference for FDD because of the lower equipment cost. But he also held open the door of using the China Mobile network if he couldn't obtain an FDD licence. 

In any event, there's no suggestion Unicom or Telecom will be forced to actually build a TD network. They will simply have to wait awhile. Given that they are at least a year behind China Mobile in 4G preparations, that is no handicap.

Anti-trust, Chinese style

Remember the probe into China Telecom and China Unicom for alleged anti-competitive behaviour?

The two companies were called out for price discrimination against rival ISPs back in November 2011 - the first such case under the 2007 Anti-Monopoly Law in Chinese telecoms.

Fifteen months on, it remains the only such case and its status is very much a mystery.

A long piece from the Beijing News (posted here on Sina Tech) quotes an anonymous source as saying the investigation “has met with considerable resistance.”

No surprise there. Anti-trust researcher Wang Xiaoye says that the facts of the case are clear. If this had happened in the EU, it already would have been settled, with heavy penalties imposed on the operators.

The two Chinese operators do face potential fines of billions of yuan, but of course the case has to be settled first.

Technically, there isn’t even a formal record of a case.  It came to light through a CCTV interview with a National Development and Reform Commission official. The NDRC is investigating, but has posted nothing on its website. Neither operator has mentioned the case in its financial reports, or made any contingencies for it.

The two operators have reportedly asked for the case to be dropped, and have promised to cut their broadband access fees (though that presumably would only make it harder for their competitors).

In other words, it’s business as usual in Chinese telecoms; the operators and the MIIT a law unto themselves in an environment of zero transparency.

A Zhejiang University professor, Zhao Wei, is quoted in the story as calling this ‘Chinese-style anti-trust.’

This maybe history, but it's worth recalling because the market is liberalising to allow in MVNOs. The MIIT has had almost nothing to say about how it will guarantee the newcomers access to incumbent networks or protect them from price discrimination. Etcetera, etcetera.

Happy New Year of the Snake. Here’s to more of the same.

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