The Chinese 4G wireless market took a leap on August 23 as China Mobile — which has the world’s largest number of subscribers, at over 700 million — doled out contracts for the spectrum to various global telecommunications firms.
The carrier made good on its promise to unleash 4G licenses before the end of 2013, and as expected, Chinese firms received most of the equipment contracts. Huawei and ZTE — both telecom manufacturers — received over 50%, according to reports. Foreign firms including Sweden’s Ericsson, France’s Alcatel-Lucent, and Finland’s Nokia divvied up most of the rest.
Global telecom equipment companies have been eyeing China’s 4G market because it promises huge revenue for anyone who gets in on supplying the higher-speed wireless to the nation’s growing smartphone user base. The talk of 4G build-out in China has increased in recent weeks as Apple engaged in talks with China Mobile executives regarding bringing the iPhone to the carrier; according to both companies, the talks went well, so beginning the roll-out of 4G is the next step to ready China for an iPhone onslaught. Indeed, Apple is rumored to have developed a cheaper iPhone specifically for the Chinese market, dubbed the iPhone 5C, although the company has not confirmed anything ahead of its September 10 press conference.
China Mobile is investing in 207,000 base stations to spread 4G wireless coverage, and the telecom companies lucky enough to receive a contract will get in on the purported $7 billion project to build out 4G before the Chinese government releases its own licenses at the end of 2013. (The telecom contracts China Mobile issued itself for equipment manufacturers are worth $3.2 billion.)
Even if the rumors prove false and iPhones don’t explode onto the Chinese market any time soon, or do so unsuccessfully, China Mobile already has a handful of smartphones prepped to operate across a 4G network. They stand ready and waiting while the implementation of the 4G coverage itself takes place, as the telecom vendors work with China Mobile to establish its base stations around the country. While the roll-out will likely be slow, it’s going to be huge in its eventual effect. Expect foreign companies to keep fighting their way in.