Chinese trio get FDD trial licences, no 700MHz June 30 2014

All three operators now have paired and unpaired spectrum, but will wait until 2015 for commercial FDD, and 2020 for sub-1GHz

By Caroline Gabriel

China Mobile suffered from being the only major cellco with TDD spectrum for 3G, but has lobbied successfully to grasp the advantage back in 4G. It got its wish that initial allocations, for itself as well as China Unicom and China Telecom, would be in unpaired spectrum, where Mobile has a considerable headstart in expertise, ecosystem and roll-outs. But its rivals may not have to wait too long to receive their preferred, FDD licences too, and all three companies have already been awarded trial rights.

However, it seems likely they will have to wait until 2020 to gain usable spectrum in 700MHz, coveted for its long range and indoor penetration, which greatly reduces the cost of rural build-outs and initial, coverage-driven LTE projects.

Initially, then, all three companies will have higher band spectrum, both paired and unpaired, though it could take a year or even two for the FDD trial licences to be converted into commercial ones (there was a wait of about two years for the same process in TDD, though the huge 'trial' networks which China Mobile constructed during that time were hardly just testbeds.

The length of the wait will be significant for the two smaller operators, whose 3G networks are FDD, and which would prefer to lead with paired frequencies in LTE too, adding TDD at a later stage, for capacity, when the ecosystem has matured. However, Mobile's lobbying for TDD-first means they will have to adopt a hybrid TDD/FDD strategy, a fact which should stimulate the equipment and device ecosystems - another key Mobile objective - but could also make a RAN sharing deal between all three players more likely.

Talks about such an agreement are reportedly ongoing, and the long wait for 700MHz, which improves cost efficiencies for LTE, may be another incentive to come to a deal.

Last week, China Telecom was granted a trial FDD licence so that it can start building networks in major cities immediately, and Unicom and Mobile quickly received their own similar allocations. The bands were not specified but was certainly not sub-1GHz.

China faces the same tensions and trade-offs between the broadcasters, incumbent in the 700MHz spectrum, and the mobile operators, eager for the digital dividend in frequencies which are particularly suited to affordable wide area coverage. The head of China's broadcasting regulator, GAPPRFT, Jiang Wenbo, said this week that it will not complete the handover of the 700MHz spectrum until 2020.