Telecoms giant Huawei confident as release of 4G mobile licences nears

Telecoms giant says work done on domestically developed standard gives it an advantage

PUBLISHED : Thursday, 24 October, 2013, 3:46am
UPDATED : Thursday, 24 October, 2013, 3:46am

Huawei is confident that it is in pole position in the race to benefit from the release of 4G mobile licences on the mainland.

The telecommunications giant says its position as an equipment provider for the domestically developed TD-LTE (time-division long-term evolution) 4G standard gives it an edge.

"The TD-LTE industry is like a volcano. There is a lot of energy accumulating," Qiu Heng, Huawei's vice-president of TD-LTE product line wireless networks, said in Hong Kong yesterday. "This volcano will erupt at the end of November, when we expect the licences will be released."

The home-grown 4G standard was developed in 2007 by mainland firms including China Mobile, Huawei and ZTE. Supporters say its single channel makes the network more bandwidth-efficient.

Beijing announced in May last year that it would launch the commercial rollout of advanced, high-speed 4G mobile infrastructure built by all three mainland network operators as part of its five-year plan for the telecommunications sector.

Most industry watchers expect Beijing to initially grant 4G licences only to services that use TD-LTE networks.

Qiu said Huawei was involved in 48 of 56 TD-LTE contracts worldwide, with 70 per cent of subscribers under Huawei networks.

"It seems likely that China's first 4G licences will be for TD-LTE," he said. "[But since] Huawei is a key equipment provider for all three telecoms operators in China, even if the 4G licences don't all go to TD-LTE, Huawei will still benefit from 4G-related developments in China."

China Mobile is expected to lead the initial rollout of 4G networks. It plans to set up 207,000 4G base stations in urban and rural areas this year. China Telecom will install 70,000 base stations and China Unicom 30,000.

Ricky Lai, an analyst at Guotai Junan International, said Huawei had a "high chance" of winning the bid to provide 4G network equipment for China Mobile.

Lai said foreign companies had little chance of gaining a significant share because "domestic operators have the lower cost-price advantage" but Huawei would be battling domestic competitors including ZTE.