Qualcomm sweeps aside Chinese firms in TD-LTE device tender

Qualcomm-powered devices have dominated China Mobile’s just-completed TD-LTE tender, sweeping aside local firms.

The 200,000-unit tender was not large by Chinese standards, and comprised mostly data cards and MiFi devices, but is significant as China Mobile’s biggest single procurement of 4G terminals to date.

A rueful piece in 21^st Century Business records that the only China-built chipset to win was Huawei’s Hisilicon, which was used primarily in Huawei’s own devices.

Qualcomm won primarily because of its ability to support ‘5 modes and 10 bands’ (the modes are GSM, W-CDMA, HSPA, TD-LTE and FDD-LTE; the bands vary from market to market). Moreover, the US firm last year gave a big assist to China Mobile’s plan to make TD fully global by declaring that all of its chips would support both modes of LTE.

The outcome of the tender “frustrated” local players Spreadtrum and Leadcore, and Taiwan’s Mediatek, the story said.

An executive from one firm complained that at the current stage, the market was all about data cards and CPE, which didn’t require “all modes”.

He said the 4G handset era, still a year or so away, would allow domestic chip players to play to their strengths in pricing, but also called on operators “to give us more opportunities and time.”

In the meantime, for focus for all three firms would be on developing multi-mode single chip products, the article says.

China Unicom: Sure, we like TD-LTE

China Unicom has bowed to the inevitable and has become the third and final Chinese cellco to sign up for TD-LTE.

At least, symbolically. 

After much industry speculation, chairman Chang Xiaobing has confirmed that the operator has already begun building a TD-LTE trial network, citing the lure of the early issue of TD-LTE licences.

Chang said at the company’s interim result in Hong Kong that it was highly likely that TD-LTE licences would be issued first, just as TD-SCDMA was the first 3G licence handed out five years ago.

In the past, Chang had indicated a preference for FDD-LTE, the natural choice for a W-CDMA player.

But, like his counterpart Wang Xiaochu at China Telecom, his views have evolved over the last few months. Earlier this year Chang said Unicom aimed to transition to 4G through its “own strategy” – a reference to FDD – and last year spoke of “unswervingly remaining on our own technology path.”

Given the limited benefits of TD and the complete lack of detail about either the trial or future rollout, Chang’s commitment appears little more than a politically correct gesture.

China Telecom has said it will use TD as a supplement to FDD-LTE in urban areas, but Chang has not even gone that far.

As an anonymous source put it to Sina Tech:

Unicom will implement a TD-LTE test network to support national innovation, but it still will maintain every kind of preparation and trial for FDD-LTE. In the 4G handset and network era China Unicom still probably will be predominant.”

For all that, Chang said that while he thought the TD-LTE licence would be issued first, he didn’t think it would happen this year as the MIIT has promised.

EU curveball to test China market fairness

The European Union has thrown China a massive curveball.

EU Trade Commissioner Karel De Gucht is willing to drop his case against Chinese telecom subsidies if European firms win a big share of China Mobile's 4G tender, FT.com reports.

China Mobile’s tender for a 100-city TD-LTE rollout is the telecom industry’s biggest contract this year.

But Nokia Siemens surprised everyone by becoming the first non-Chinese vendor ever to undercut local players. It pitched a price of 33,000 yuan ($5,460) per carrier, compared with 35,000 yuan offered by both Huawei and ZTE.

Huawei and ZTE last year won the lion’s share of China Mobile’s 4G trial contracts, infuriating NSN and other foreign vendors.  Under China’s tender rules China Mobile is bound to award the biggest portion of the business to the lowest bidder.

The operator now has another reason to make sure that NSN gets the biggest piece of the pie.

Yet, as local website Sina Tech observed, this flies in the face of China’s practice of using fat domestic tenders to nurture the local industry:

“But for many years tenders by Chinese operators have tilted towards domestic suppliers, with Huawei and ZTE accounting for the lion’s share, [making it] impossible for foreign vendors to dominate.”

The FT story, published late Monday, has not been picked up by  China's usualy lively tech press, who will have been instructed to wait for the official Xinhua version. The tone of that statement, when it appears in the next 24 hours or so, may tell us a lot about China’s response.

It may report the story straight. Or, emboldened by their decisive win in the solar panel dumping case, Chinese officials may press home the advantage and complain strongly about EU blackmail.

Lowest bid: NSN surprises in China 4G tender

Nokia Siemens Networks has thrown a curveball into China Mobile’s multi-billion dollar 4G tender by undercutting the field.

It is the first time a non-Chinese telecom vendor has bid below Huawei and ZTE in a China contract.

The tender, to supply TD-LTE equipment for 207,000 base stations in 100 cities, is the world’s biggest telecom equipment contract this year. 

NSN’s bid of 33,000 yuan ($5,460) per single carrier was the lowest of nine vendors who took part, according to Chinese media reports. Huawei and ZTE both pitched 35,000 yuan.

The move has surely surprised the super-confident Huawei camp, which has publicly predicted it would win the biggest share.

Huawei and ZTE have supplied roughly three-quarters of the equipment for China Mobile’s pre-commercial rollout in 13 cities.  That’s only slightly below the 80% share of China Mobile’s TD-SCDMA 3G network contracts that they enjoyed. 

But foreign vendors have expected a much bigger piece of the globally-supported TD-LTE business, and were reportedly furious at the heavy weighting toward the local players in the trial stage.

As local tech website Sina Tech [zh] delicately observes, China Mobile now faces a “difficult choice.” As the lowest bidder, NSN “normally” would get the highest share.

“But for many years tenders by Chinese operators have tilted towards domestic suppliers, with Huawei and ZTE accounting for the lion’s share, [making it] impossible for foreign vendors to dominate.”

China Mobile is bound by rules of the tender to award to the lowest bidder, yet must “balance between Chinese and foreign” suppliers, it said.

The tender is sure to be watched closely by EU officials for any obvious domestic ‘tilt’. The EU Trade Commissioner has launched a probe into alleged state subsidies for Huawei and ZTE exports to Europe.

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.