Not so fast: FDD licences revisited

This blog pleads guilty to a mild bout of irrational exuberance over the issue of FDD-LTE trial licences on Friday.

For sure the licences give China Telecom and China Unicom the chance to build out FDD in 16 cities. But in each case only two of those cities are tier-1, and it's telling that Beijing is not one of them.

Plus, as Sina Tech notes, the wording of the MIIT announcement is revealing, repeatedly declaring that these were "LTE network integration trials," just to make sure that the trial deployments would include TD-LTE and not just the much-preferred FDD flavour.

So the allocation of the licences is signficant, but the detail suggests the MIIT is not in a hurry to open the gates to full nationwide FDD rollout. TD, the national champion, gets precedence.

FDD is a big deal for the two operators because, to quote Sina again, competing with China Mobile on TD alone is a "dead-end street."

On the other hand, Telecom and Unicom execs will no doubt be planning to take advantage of the hazy definition of just what is an FDD base station or terminal, and just how vigilantly the MIIT will police it. A report at IT Sohu suggests that many of the networks will become "underground FDD" systems - operating commercially under the cover of a TD licence. That wouldn't be the first time in China telecoms.

FDD rollout cities

China Telecom: Lanzhou, Xian, Shijiazhuang, Jinan, Chongqing, Chengdu, Zhengzhou, Wuhan, Nanjing, Hangzhou, Shanghai, Shenzhen, Nanning, Hefei, Nanchang, Haikou.

China Unicom: Harbin, Shenyang, Shijiazhuang, Jinan, Taiyuan, Zhengzhou, Chongqing, Chengdu, Wuhan, Nanjing, Hangzhou, Shanghai, Fuzhou, Changsha, Guangzhou, Shenzhen.

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.

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. 

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.

TD and FDD-LTE must combine: GSMA

The key to LTE success? The GSM Association view is it will be the availability of unified TD/FDD devices.

GSMA director-general Anne Bouverot says it's “encouraging” that products containing TD-LTE chipsets are already on the market.

“But that's not enough to drive the market to scale. The key requirement for success is dual mode chipsets for TD and FDD LTE,” she said at today’s GTI Summit in Hong Kong.

“I cannot emphasise enough that dual chipsets are absolutely critical for the success of this industry.”

The LTE devices will need to be capable of being sold in multiple markets and to enable roaming, she said.

“We can't allow the industry to split again between technologies as we saw in the past,” she said, citing GSM and CDMA in the 2G era and W-CDMA, cdma2000 and TD-SCDMA in 3G.