On December 4, 2013, the Ministry of Industry and Information Technology (MIIT) issued 4G licenses to the trio - China Mobile, China Telecom and China Unicom for adopting Time Division Long Term Evolution (TD-LTE) technology, a home-grown technology.
TD-LTE vs. LTE-FDD
According to the official explanation for issuance of 4G license published by MIIT on its website, although China Telecom and China Unicom expressed that they would like to combine the TD-LTE network and the LTE- Frequency Division Duplex (FDD) network, these three operators only applied for 4G licenses for TD-LTE at this time and therefore were granted such 3G licenses upon their application.
Furthermore, MIIT confirmed that it would issue 4G licenses for LTE-FDD upon the application from the business operators and success of trail of LTE-FDD network and combination of TD-LTE and LTE-FDD networks. However, MIIT explicitly stated that the PRC government has made plans for frequency for TD-LTE and LTE-FDD networks.
Consumer Spending on Information Technology
The purpose of the issuance of 4G license is to promote consumer spending on information technology. MIIT referred to Several Opinions on the Promotion of Consumer Spending on Information Technology to Expand Domestic Demand ("Opinions") issued by State Council in August 2013.
In accordance with the Opinions, PRC government aims to increase the consumer spending on information technology to RMB 3.2 trillion until 2015 with a rate of 20% each year. MIIT believes the 4G business accelerates: (1) procurement of network equipment; (2) upgrading of mobile phones; and (3) development of new applications. Therefore, infrastructure supplier, end instrument suppliers and software developers will all benefit from the issuance of 4G licenses.
Schedule of Commercial Operation
Neither the MIIT's announcement nor its official explanation provide for a schedule of the commercial operation of such 4G services, China Mobile has been reported to conduct massive trail for years. It is also reported that the PRC government allocated 4G spectrum to the trio in November as: China Mobile with spectrum in the 1880MHz-1900MHz, 2320MHz-2370MHz and 2575MHz-2635MHz bands, whilst China Unicom with frequencies at 2300MHz-2320MHz and 2555MHz-2575MHz and China Telecom with frequencies at 2370MHz-2390MHz and 2635MHz-2655MHz.