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Huawei and ZTE win big in China Mobile LTE contracts

Chinese vendors Huawei and ZTE have received the most lucrative 4G contracts from China Mobile as it prepares to build out its next-generation network.

With around 750 million subscribers, it is the Chinese market leader and the world’s largest mobile operator.

While China Mobile has also awarded contracts to western vendors including Alcatel-Lucent, Ericsson and NSN, roughly half of the CNY20 billion ($3.3 billion) that it plans to spend on TD-LTE equipment will go to Huawei and ZTE (around 25% each). The three aforementioned western vendors have a share of around 10% each.

By year-end 2013, China Mobile aims to deploy 200,000 base stations using TD-LTE technology in order to provide LTE coverage to the urban centres of 100 major cities. The operator reportedly spent only a third of its 2013 CAPEX budget of CNY190.2 billion across the first half of the year. This allows for higher expenditure on its LTE launch.

China Mobile’s TD-LTE push has added weight to the belief that Apple may be on the cusp of announcing an iPhone model that supports the LTE strain. The iPhone’s present lack of support for the tech is believed to be the main reason that China Mobile is the only operator in the country that does not yet have an official deal with Apple.

China Mobile favouring Huawei and ZTE over European vendors will be of interest to the European Commission, which is investigating allegations that Chinese vendors are receiving illegal subsidies from the country’s government in order to undercut their European rivals.

The EC is investigating the situation despite the lack of formal complaints from vendors such as Ericsson, Alcatel-Lucent and NSN. It is likely that these firms are concerned about losing potentially lucrative Chinese network contracts if they register any discontent.

 

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