Why China could be the largest potential market for 4G

Global Business

(File photo/Xinhua)

Just days after two of China’s major telecom carriers received the green light to test with FDD-LTE fourth-generation services, China Telecom has already launched its first batch of 4G compatible smartphones.

There are three dominate businesses in China’s telecommunications industry: China Telecom, China Unicom and China Mobile. All are state-run. Previously, only China Mobile had a state license for 4G.

Chart: Mobile phone subscriptions in China, by provider

Data: Reuters; SeekingAlpha

The Ministry of Industry and Information Technology said in a statement that it made the approval after the two mobile service operators — China Telecom and China Unicom– applied for the pilot experiments.

This move will allow China Telecom and China Unicom more competition within the 4G field with market leader China Mobile.

An estimated 500,000 4G base stations will be built across China, and the number of 4G telecommunication technology users is expected to exceed 30 million by the end of this year. Over the last decade, mobile phone subscriptions in China have increased more than 267 percent: from just under 335 million in 2004 to 1.229 billion in 2013. Broken down by population, that’s roughly 89 phones per 100 people.

Chart: Total mobile phone subscriptions in China, by year

Data: United Nations International Telecommunication Union

“China Mobile’s TD-LTE network will cover major urban districts and counties of most prefecture-level cities in China within this year. And some of the towns will have 4G network hotspots,” Liu Lihua, vice minister of the ministry, told The AP.

Map: Mobile phone subscriptions by country, 2013

Darker colors represent higher rates of mobile phone subscriptions.
Data: United Nations International Telecommunication Union

While there are currently more than 250 million 4G network users around the world, Liu said that as China’s homegrown 4G telecommunication technology is going global, the country will have the largest market for 4G technology in the future.

Reporting includes the Associated Press