China Mobile plans to spend more on 3G terminal subsidies in 2010.
The outfit has tripled the amount of subsidies from the current year level and is expected to spend $4.4 billion next year. The huge amounts of cash will enable the outfit to push into the 3G space in the worlds largest economy.
China Mobile has 70 per cent of the Chinese wireless market but has been taking a caning from China Unicom. The outfit uses its own TD-SCDMA 3G standard but with that sort of money to spend it is fairly clear that foreign salesmen will be showing up trying to flog the outfit shedloads of 3G gear.
The company recently launched a line of smartphones dubbed Ophones based on the TD-SCDMA technology which uses Google's Android mobile operating system.
All three carriers have commercially launched their 3G networks over the recent months, but take-up has been slow. Market leader Mobile has been hamstrung by the limited number of handsets for the new TD-SCDMA system.
But now with its device range expanding and the network expected to be rolled out to 238 cities by year-end, the market’s 800-pound gorilla appears ready to assert itself.
Analyst firm BDA says China Mobile plans to spend 120 billion yuan on handset subsidies this year, most of it on TD-SCDMA. It laid out 50 billion on subsidizing phones in the first half of the year, with less than 12% going to TD phones.
Now a China Mobile source told has told website C114 that the company would leverage its financial strengths “to stage a price war to resist Telecom’s and Unicom’s 3G” services.
China Mobile has 503 million users, Unicom 142 million and China Telecom 44 million customers. Of these 3G comprises a tiny fraction - China Mobile has 1.3 million using TD-SCDMA, Unicom 350,000 using W-CDMA and China Telecom 1.3 million on its CDMA EV-DO network.
TD-SCDMA is primed to evolve into a global standard: TD-LTE. Granted, TD-LTE's sales pitch is not all that different from its ancestors - i.e. making use of unpaired spectrum to boost capacity in urban environments where FDD macro networks get overloaded. What is different this time around is a bigger ecosystem of vendors developing it - admittedly for just a single market at the moment, but also the biggest single mobile market in the world.
The other key difference is that TDD has always been primarily a data play. But from 2001 up to 2008, 3G cellcos were still primarily in the voice business, and FDD allowed them to continue milking that cash cow. That worked fine when 3G data usage was still mostly ringtones, wallpapers and other walled-garden content.
Then the iPhone happened. Smartphones got smarter and data usage skyrocketed so high that E1 backhaul links became the new bottlenecks. If ABI Research is to be believed, by 2014 mobile users will be transmitting a total of 1.6 exabytes a month (compared to 1.3 exabytes for all of last year).
Hence all the interest in LTE, as well as related technological tricks to offload data traffic and maximize RAN capacity like spectrum refarming in the 900- and 1800-MHz bands and femtocells. TD-LTE is another tool in the toolbox, and by the time we start hitting monthly exabyte levels in five years, its predecessor in China will have been put through the ringer enough to qualify as "seasoned" if not "mature".
Of course, all that depends on a ton of factors over the next five years. Still, TDD is a lot closer to realizing its potential than it was at the start of the decade.
If nothing else, TD-LTE may have the novel distinction of being the quietest evolution the cellular world has yet seen. That will depend on how much progress Qualcomm and other chipset vendors make with dual-mode FDD/TDD chipsets, but once devices are capable of roaming seamlessly between both, TD-LTE may be the first RAN acronym that won't need to be marketed to end-users who don't give a toss what it's called anyway.
ST-Ericsson is creating a strong foothold in the evolving Chinese 3G market, and is powering the first modem for TD-HSPA, which can take advantage of the fastest speeds offered by China Mobile.
The silicon joint venture is working with Chinese partner Hojy Wireless on modules that will turn up in data cards and dongles early next year. China Mobile will hope these will boost uptake of its new network by heavy duty data users, a market where China Telecom's EV-DO system has so far shone more brightly. The M6718 modem could also be included in notebooks, netbooks and smartphones in future, as the market moves beyond data cards.
Mobile broadband modules, for incorporation in a range of devices, are an important part of the broader ST-Ericsson portfolio, with co-parent Ericsson a key customer as it bolsters its module business in 3G and LTE. The M6718 is a dual-mode TD-HSPA/EDGE device, supporting 2.8Mbps downlink and 2.2Mbps uplink.
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