Friday, October 22, 2010

China Mobile’s leadership in TD-LTE global development

MELBOURNE, AUSTRALIA: According to Ovum, LTE will gain traction after 2012 with forecast connections of over 300 million in 2015. This is 9.5% of total mobile broadband connections of 3,161 Million. TD-LTE may provide effective upgrade for existing technologies such as TD-SCDMA, TD-HSPA, HSPA, EVDO and WiMAX.

“The fierce competition of the Chinese mobile industry, and longer lead time to sufficiently incubate the national TD-SCDMA standard in Mainland China requires operators and other ecosystem stakeholders to act pro-actively for the sustained development of TD technologies and services”, said CW Cheung, Research Fellow & Consulting Director, Asia-Pacific.

China Mobile is collaborating with its partners Verizon and Vodafone to plan large scale network trials and end-to-end service commercialisation tests of TD-LTE. Many operators in Europe, US and Asia (e.g. Clearwire, NTT DoCoMo, Softbank, Orange, etc.) have joined the move.

China Mobile has engaged support from the Ministry of Industry and Information Technology (MIIT), international vendors in chipset (e.g. QualComm for FDD/TDD chipset), network equipment, CPE and device. The concerted efforts will aim to close the ‘gap’ currently led by LTE FD.

The synergy of cross-strait collaboration for TD-LTE value chain and ecosystem development will accelerate the process. The Economic Cooperation Framework Agreement (ECFA) trade framework has removed barriers to bilateral trade between Mainland China and Taiwan.

It will help accelerate the synergic creation of scale economy for the TD value chain - leveraging on Taiwan’s mature ODM/OEM capability in chipset, CPE and systems, and the opportunity to access huge TD-SCDMA market of China Mobile, with support of local vendors and access to labour market.

Taiwan has demonstrated its unique capability in WiMAX value chain. They supply nearly 80 percent of the worldwide WiMAX equipment. The Taiwan Economic Department has recently announced to invest US$ 220 million in next four years to sustain industry development in WiMAX. TD-LTE and WiMAX have shared many common core technologies.

There are some critical success factors for TD-LTE, as detailed below:

* Clarity of telecoms policy on spectrum release plan to support early launch of TD-LTE in Mainland China.
* More explicit policy and funding support to TD-LTE by Taiwan government.
* Mass availability of low cost and mid-market smartphones / devices; interoperability of TD and FD devices; standardisation of “voice over LTE”; and early availability of voice-centric handsets to help create differentiated value propositions for TD-LTE adoption in emerging markets.
* Early launch of ECFA enhancement to Taiwan operators, and reciprocal trade arrangement for Chinese operators to deepen cross-strait collaborations.
* Regulatory reforms in both Mainland China (e.g. liberalization of basic telecoms operation) and Taiwan (e.g. liberalization of Types I & II regulations), together with resolution of related regulatory issues in resource management (e.g. numbering) and infrastructure sharing, etc. to enable facility-based and service-based competition.

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