Bloomberg News

China Mobile Says Next Phase of 4G Tests May Finish by June

November 15, 2011

(Updates with Apple declined to comment in 13th paragraph.)

Nov. 15 (Bloomberg) -- China Mobile Communications Corp., the world’s largest carrier by subscribers, said it will complete the next phase of its fourth-generation network trials by June as it tries to lure device makers including Apple Inc.

The company finished first-phase trials of the TD-LTE system in six cities with 850 base stations in September, Li Zhengmao, an executive vice president at China Mobile Communications, said at a press conference in Hong Kong today. The trials featured seven network vendors including Huawei Technologies Co., ZTE Corp. and Alcatel-Lucent.

China Mobile Communications, which uses a homegrown third- generation network standard that doesn’t support many popular devices including Apple’s iPhone, aims to shift to a 4G technology next year that would have broader support from international handset makers. China Mobile and Clearwire Corp. said in September they would cooperate to promote high-volume commercial production of chipsets and devices for the system.

“With the popularity of mobile Internet and smart devices, data use is increasing at an explosive speed,” Li said. “The need to speed up commercialization of LTE is compelling.”

The TD-LTE system China Mobile and Clearwire are adopting for fourth-generation mobile networks provides users with faster Internet connections than current 3G systems for downloading videos and games on their phones.

The next trial phase will include “large scale commercial” use, and will also feature a network demonstration setup on Beijing’s main Chang An Street and in the city’s financial district, Bill Huang, general manager of China Mobile’s Research Institute, said today.

Incompatible iPhone

China Mobile had 633.5 million mobile subscribers as of Sept. 30, the company reported last month. Still, only 43.2 million, or 6.8 percent, made the switch to the company’s 3G network.

The company estimates about 50 percent of its user base is now “ready” for a smartphone after the price for devices comparable to an iPhone3 dropped to about $100, Huang said. He declined to comment after his speech on when Apple would make an iPhone for China Mobile.

Many users haven’t opted for the company’s 3G service because of handset selection. China Mobile had 9.5 million customers using iPhones on the company’s 2G and Wi-Fi networks as of Sept. 30, Chairman Wang Jianzhou said in Hong Kong on Oct. 13. Those users can’t switch to China Mobile’s 3G system because it is incompatible with the device.

China Mobile got a “positive answer” that Apple will work on making an iPhone for the new TD-LTE Network, Wang said in a Sept. 15 interview in Dalian, China.

Compatible Smartphones

Apple may make an iPhone compatible with the new network by the middle of next year, Donald Lu, a Beijing-based Goldman Sachs Group Inc. analyst, said at the conference. Other handset vendors including Samsung Electronics Co. and HTC Corp. may make half of their smartphone models operable on the 4G system next year, Lu said.

“TD-LTE has garnered far stronger support” than China Mobile’s homegrown 3G network, Lu said.

Carolyn Wu, a Beijing-based spokeswoman for Apple, declined to comment on whether the company would make a TD-LTE iPhone.

China Mobile Communications is the state-owned parent company of China Mobile Ltd. The Hong Kong-listed unit declined 0.1 percent to HK$76.50 at close on the city’s stock exchange.

--Edmond Lococo. Editors: Subramaniam Sharma, Suresh Seshadri

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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