China’s top three operators may be gearing up for LTE rollouts, but 3G will likely remain a staple in the country for years to come, especially for China Unicom.
Research from IHS iSuppli has shown China’s investment in LTE is set to double this year to $100 million (€71.8 million) as the country’s carriers upgrade their networks. The figure is expected to triple to $300 million in 2012, $600 million in 2013 and $1.3 billion in 2014.
However, these optimistic figures still lag behind the country’s projected investment for 3G, prompting Kevin Wang, director of China Research at IHS, to predict LTE will be a niche in the country for the next three years.
“All three carriers in China will continue to focus on developing 3G networks and users to improve ARPU,” Wang told Telecoms Europe.net.
The firm predicts 2G and 3G spending by China’s carriers will hit $4.12 billion in 2011 and gradually fall to $2.27 billion in 2014, however the latter figure is still almost double that of projected LTE spending.
Wang tips China Mobile to lead the LTE charge in the country, with a commercial launch by the year-end, with China Telecom and China Unicom set to follow suit in 2012 and 2013 respectively.
“China Telecom and China Unicom have limited capex for LTE networks,” says Wang. “These two carriers would prefer utilizing 3G and Wi-Fi for now to provide high speed wireless connections to their subscribers.”
China Unicom has the least motivation to deploy LTE and 4G due to the ‘reliable’ state of its current network, the report reveals. The carrier holds a bandwidth advantage over its competitors due to its W-CDMA network and future HSPA+ upgrades could provide download data rates up to 40Mbps and peak uplink rates of 11Mbps.
The carrier is also the country’s sole retailer of Apple’s iPhone, and can expect to reap significant ARPU rewards resulting from the device.
“Today, there is no strong need for LTE networks. LTE devices are extremely limited in availability and 3G and 3.5G networks are capable of supporting most mobile applications,” Wang notes.