China Telecom (CTC) is facing mounting pressure in the LTE market after rival China Mobile launched an extensive TD-LTE deployment—building 200,000 base stations across more than 100 cities. In response, the country’s third-largest wireless operator held its own LTE procurement in early October for both TD-LTE and LTE FDD base stations, preparing for an imminent LTE licensing decision. CTC’s leadership recognizes that its 3G network (CDMA EV-DO) needs a major upgrade to remain competitive, and LTE is the clear path forward.
CTC did not disclose the total bid value. Industry estimates place the order around RMB 5 billion (about US$820 million), roughly half of its planned 4G capital expenditure for 2013. Reports indicate the procurement covers between 60,000 and 70,000 base stations, with roughly 30% earmarked for TD-LTE and 70% for LTE FDD. ZTE emerged as the largest supplier, capturing about 32% of the order, followed by Huawei at 29% and Alcatel‑Lucent at 16%. Ericsson and Nokia Siemens Networks (NSN) each received only around 4%—a marked decline from the roughly 11% share they secured in China Mobile’s much larger TD-LTE tender. Other vendors on the list included Datang Mobile and New Postcom at approximately 6% each, FiberHome at 2%, and Potevio at 1%.
Wins by ZTE and Huawei were largely expected given their roles as major Chinese equipment suppliers, and the sizeable share for Alcatel‑Lucent was somewhat surprising but explainable. CTC historically sourced its CDMA network from a small set of key vendors, and operators often favor continuity with familiar suppliers to ensure compatibility and reduce potential hardware conflicts.
CTC’s LTE strategy has attracted attention because, unlike China Mobile (TD‑SCDMA) and China Unicom (WCDMA), its 3G platform lacked a straightforward migration path to 4G. Initially, China Telecom favored LTE FDD—citing international success stories (such as Verizon), technology assessments, cost considerations, and handset availability—and formally requested an LTE FDD license from the Ministry of Industry and Information Technology (MIIT) over the summer.
That business-oriented request met regulatory resistance. Chinese authorities have strongly backed TD-LTE as a national priority, and MIIT initially rejected CTC’s FDD-only proposal. Under pressure to support TD-LTE rollout, CTC adjusted its plan—raising the proposed TDD share from about 10% in the original submission to roughly 30%.
Dual LTE Networks
If implemented as revised, CTC would become one of the only operators worldwide to operate both LTE FDD and TD-LTE concurrently. That dual-network approach brings notable risks in addition to higher investment. CTC’s mitigation plan is to deploy TD-LTE in highly congested urban hotspots where mobile data demand is highest, while using LTE FDD in broader areas where voice traffic and general coverage remain priorities. While this division is logical, it introduces operational complexity where both networks overlap—billing, handover, device compatibility (especially VoLTE across TDD and FDD), and roaming could all present challenges. Running two separate access technologies may also require additional transport/backhaul capacity for each network.
To avoid duplicating infrastructure, CTC at one point explored leasing TD-LTE capacity from China Mobile rather than building its own TDD network. That option was ultimately abandoned—partly because CTC’s increased TDD commitment made leasing less practical and partly because commercial leasing arrangements raise thorny issues around cost, billing reconciliation, and service assurance. China Mobile itself showed limited willingness to lease its network to a competitor. Beyond commercial barriers, the decision reflects regulatory dynamics: CTC has been pressured by government policy to support TD-LTE deployment even though competing directly with China Mobile in TDD is commercially difficult.
Spectrum Issue
MIIT has allocated a total of 95 MHz for LTE FDD. Within that allocation, China Telecom received 30 MHz in paired bands (1755–1785 MHz / 1850–1880 MHz). This allocation is significant because it gives CTC FDD spectrum in the 1800 MHz range—a band with favorable propagation characteristics that supports wider coverage and improved signal performance. China Unicom also received 30 MHz of FDD spectrum, in the 2100 MHz range. These assignments suggest MIIT intended to provide CTC with competitive spectrum resources to help it challenge larger rivals. China Mobile was allocated 35 MHz for FDD, although the operator appears primarily focused on TD-LTE and may not prioritize FDD investment.
By comparison, TD-LTE was assigned a much larger aggregate allocation—about 190 MHz in the 2.5 GHz and 700 MHz considerations—while LTE FDD totals 95 MHz. The imbalance in spectrum distribution reflects two policy signals: first, TD-LTE has been given greater emphasis in the hope it will flourish and demonstrate domestic leadership in that standard; second, regulators appear to want other carriers—most notably China Telecom—to participate in TDD to bolster the market and make TD-LTE more competitive.
China Telecom’s entry into LTE has added complexity to China’s 4G landscape. If CTC receives licenses for both TDD and FDD, it risks the operational and commercial difficulties of running parallel LTE systems, which could hamper long-term competitiveness. CTC’s stronger commercial opportunity likely lies in LTE FDD, particularly since China Unicom has not finalized its strategy and leaves an opening in the FDD market. Historical trends from the 3G era also suggest adoption may be gradual: LTE demand is expected to grow incrementally rather than surge immediately, implying a phased uptake where network economics and handset availability will shape the pace of deployment and market share shifts.