Ericsson seeks larger share in China's new TD-LTE tender

Ericsson is one European equipment manufacturer hoping to win a slice of an upcoming bids for TD-LTE infrastructure agreements in China, and the Swedish vendor also expects to be able to gain a bigger share of the deals than in previous tender rounds.

According to a report in China Daily, China Mobile said it will launch a new tender for TD-LTE equipment soon, and is expected to invest more than $6.44 billion (€4.89 billion) in the advanced technology this year, with 200,000 TD-LTE base stations to be rolled out in more than 300 Chinese cities. Previous reports have put the investment figure for TD-LTE at $6.7 billion this year.

Ericsson wants to ensure it gains more than the 8.1 per cent share it won in the first round of bidding last year. Citing figures from IHS iSuppli, China Daily said rival Chinese vendors won much larger shares of the tender in 2012, with Huawei gaining 23.8 per cent and ZTE 22.1 per cent.

"Ericsson is confident that it will gain a much bigger share during China Mobile's new round of bidding," Eric Feng, executive vice-president of Ericsson North East Asia, said at a recent news briefing in Guangzhou, China Daily reported.

TechCrunch noted that the Chinese government is reportedly expected to start issuing TD-LTE licences by the end of this year or in 2014 at the latest, as China Mobile ramps up the pace of rollout. As well as Ericsson and the two Chinese rivals, Alcatel-Lucent, Nokia-Siemens Networks and Samsung Electronics will also be seeking a piece of the action.

A recent report from IHS iSuppli noted that China Mobile is moving ahead with TD-LTE in advance of its two main domestic rivals, China Unicom and China Telecom, and is expected to account for the majority of the country's subscribers until 2017. The number of China Mobile TD-LTE subscribers is forecast to reach 228.8 million in 2017, representing 52 per cent of China's 439.9 million total TD-LTE users. In comparison, TD-LTE users from China Unicom and China Telecom will number 114.4 million and 96.8 million, respectively, according to IHS.

While China is seen as a hugely important market for Europe's mobile infrastructure vendors this year, Ericsson has also stressed that the contracts from Chinese operators will not necessarily prove to be the industry's salvation.

"It is a new coverage project to deploy LTE and of course we know ... coverage projects have lower profitability," Johan Wibergh, head of Ericsson's Networks unit, told Reuters earlier this month.

Price pressures in the mobile infrastructure market have already caused huge problems for vendors, notably for struggling Franco-American equipment manufacturer Alcatel-Lucent. The company is now undergoing a strategic review, and its new CEO Michel Combes has held up Ericsson as the company it wants to emulate, Bloomberg reported.

"It is possible to turn Alcatel around," Combes said in Paris, according to Bloomberg. "Ericsson was out of breath 10 years ago and they did it. We could follow a similar trajectory."

For more:
- see this China Daily article
- see this TechCrunch article
- see this Bloomberg article
- see this Reuters article
- see this IHS iSuppli release

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