China Mobile

China Mobile to put 4G network to the test in Hong Kong

Carrier hopes home-grown technology can help giant company reverse waning sales growth

PUBLISHED : Tuesday, 18 December, 2012, 12:00am
UPDATED : Tuesday, 18 December, 2012, 2:33am

China Mobile will this month start commercial services with its home-grown, fourth-generation network in Hong Kong as the world's largest mobile-phone company by subscribers moves closer to a nationwide roll-out.

The carrier would add services in the city with the 4G standard it backed called TD-LTE, to high-speed operations it began locally in April using an alternative global 4G standard, Cynthia Chan, a spokeswoman for China Mobile Hong Kong, said.

China Mobile chief executive Li Yue is betting the move to faster data networks can help reverse a trend of decelerating revenue. Sales growth will probably slow to about 6 per cent this year from almost 9 per cent in 2011, according to data compiled by Bloomberg.

Starting the TD-LTE service in Hong Kong was "very clever positioning" that should help the company win government approval for the rest of China, said HSBC analyst Tucker Grinnan. "The China Mobile Hong Kong launch is really designed to support the TD launch in China, develop the skill and show the Chinese government TD is commercially viable.By deploying a convergent network in Hong Kong, China Mobile is providing a real-world demo."

The dual network provided users better roaming coverage, while cutting installation and maintenance costs for carriers, Grinnan said. China Mobile would be the first carrier in Asia offering such a dual-mode network, Chan said.

Frequency division duplex, or FDD, and time division duplex, or TDD, are the two main methods of delivering the 4G service based on long-term evolution, or LTE, technology.

China Mobile's Hong Kong unit in 2009 had won a bid for 2600 MHz spectrum that allowed the carrier to offer an FDD services, which began in April. In February, the carrier won a second band of spectrum from 2330 MHz to 2360 MHz, which allows for the provision of TDD services.

Shares of China Mobile have gained 17 per cent this year, while the city's benchmark Hang Seng Index has gained 23 per cent.

China Mobile's state-owned parent is still conducting trials of the 4G TD-LTE service and has yet to receive regulatory approval for nationwide commercial service. The TD-LTE 4G trial in the rest of China will be expanded to 20,000 base stations in 13 cities in the second half of this year, from seven cities in the first half, the company said in August.