China Mobile's 4G word games
China's telecoms regulator needs to issue 4G licenses soon, to allow the sector to stop playing 'trial' games and move ahead with the business of providing better and faster service
I don't know about other people, but I'm getting increasingly tired of China Mobile's (0941.HK; NYSE: CHL) non-stop string of word games as it aggressively pushes the country's telecoms regulator to quickly issue 4G licenses that will allow it to offer a commercial 4G wireless service. But perhaps my frustration would be more appropriately directed at the telecoms regulator itself, the Ministry of Industry and Information Technology (MIIT), whose massive bureaucracy means it often takes ridiculously long periods to approve just about anything, putting China's telecoms market at a major disadvantage to global peers.
China Mobile officials at all levels have been issuing a strategic series of official announcements and news leaks since the company began trialing its 4G service, based on a homegrown standard known as TD-LTE, starting at the Shanghai World Expo back in 2010. Since then the carrier has built up a shadow 4G network that is essentially a commercial product, calling the network by various designations that all include the word "trial" in their name.
Of course, industry watchers will know that the reason behind this strange and elaborate dance lies in the notoriously slow moving MIIT, which has yet to formally issue 4G licenses. That means China Mobile and its two rivals, China Telecom (0728.HK; NYSE: CHL) and China Unicom (0762.HK; NYSE: CHU), can't formally offer commercial 4G services, even though regulators in nearly all other major global markets issued 4G licenses years ago.
In the latest twist of this strange increasingly tiresome story, media are reporting that China Mobile has started offering "commercial trial" service of its 4G services in the cities of Zhejiang and Hangzhou in affluent Zhejiang province. Under this latest program, users can sign up for data services on China Mobile's "experimental" 4G network, which uses TD-LTE.
Such services should offer significantly faster web surfing and downloading speeds than those currently available over any of the country's 3G networks, including China Mobile's own problem-plagued 3G network based on another homegrown technology called TD-SCDMA. But the media reports are also quick to point out that China Mobile is only offering data services for this "commercial trial" product in Zhejiang, and that traditional voice services won't be available for now.
To the best of my knowledge, this is one of the first times that China Mobile has used the word "commercial" in any of its long series of official and unofficial announcements regarding its 4G service, which it desperately wants to launch on a truly commercial basis. The use of this kind of word game is both amusing but also increasingly annoying for industry watchers like myself, as it reflects the fact that China Mobile doesn't dare to do anything to upset the regulator before the formal awarding of 4G licenses.
I have no doubt that China Mobile probably communicates with the MIIT on a daily basis, trying to apply appropriate pressure on the regulator to issue 4G licneses sooner rather than later. The latest signals indicate the MIIT may finally issue those licenses this year, perhaps in the second half of the year. But anyone who has watched China long enough knows that mixed signals are the norm from the MIIT, which famously indicated for years it was preparing to issue 3G licenses starting as early as 2003, even though it didn't actually issue the licenses until five years later.
I've previously criticised the MIIT for its slowness in other matters, which has put China's broader telecoms sector at a distinct disadvantage to other global markets that are already leading the way with advanced and innovative new 4G products and services. In addition to putting China's own sector at a disadvantage, the MIIT's slowness is forcing industry watchers like myself to have to endure this painful process of word games by China Mobile. To all of this, my plea to the MIIT is: please issue 4G licenses soon, so that we don't have to listen to more of these word games from China Mobile, and so China's telecoms carriers can move ahead with the business of trying to become globally competitive.
Bottom line: China's telecoms regulator needs to issue 4G licenses soon, to allow the sector to stop playing "trial" games and move ahead with the business of providing better and faster service.
To read more commentaries from Doug Young, visit youngchinabiz.com