China Mobile Sees No Issue With 4G TD-LTE Standard in Trial

China Mobile Ltd. (941), the world’s largest phone company by users, said its ongoing trial of fourth-generation TD-LTE network equipment is going smoothly and it has uncovered no issues with the technology.

The biggest bottleneck for adoption of the new standard is availability of devices, Chairman Xi Guohua said at the GSMA Mobile Asia Expo in Shanghai today. “If we have enough devices, we can build the base stations in a short period of time; we can upgrade our current technology to TD-LTE in a short period of time,” he said.

China Mobile is counting on a shift to 4G wireless service to help expand its data customer base, after incompatibility of its homegrown 3G network with popular devices such as Apple Inc.’s iPhone led the company to lose market share to China Unicom (Hong Kong) Ltd. (762) and China Telecom Corp. (728) Rising demand for data, to access the Internet to watch videos and play games, is replacing traditional voice and text services, Xi said.

The wireless operator will probably expand its TD-LTE trial, currently planned for 10 cities with 20,000 base stations this year, Xi said. The total number of 4G base stations will exceed 200,000 by 2013, China Mobile said in March.

“It depends on how fast the whole industry develops,” Xi said. “The device front is the bottleneck. There is no problem from the technology standpoint.”

ZTE Corp. (000063), China’s second-biggest maker of telephone equipment, plans to release TD-LTE handsets by the end of this year or early next year, President Shi Lirong said separately at the conference.

Ecosystem, Supply Chain

“We hope more and more vendors and suppliers will join in the TD-LTE ecosystem and supply chain, so step by step the operators, carriers and vendors can all get a win-win stituation” Shi said.

China Mobile fell 0.4 percent to HK$82.10 as of 11:50 a.m. in Hong Kong trading. The stock has advanced 8.2 percent this year, compared with a 5.7 percent gain for the city’s benchmark Hang Seng Index. ZTE rose 0.5 percent to HK$14.90 today.

As of the end of April, China Mobile had 672.5 million mobile-phone subscribers, according to company figures. The number exceeded China Unicom’s 212.8 million and China Telecom’s 138.5 million in the same period.

China Mobile’s share of all wireless users in China will drop to 64 percent this year from 69 percent in 2010, Anand Ramachandran, an analyst at Barclays Capital Inc., wrote in March. The share of China Unicom will rise to 22 percent from 20 percent over the same period, he estimated.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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