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UPDATE 1-China issues 4G network licences to China Mobile, Unicom and Telecom

Paul Carsten
Wednesday, 4 Dec 2013 | 5:01 AM ET

* China Mobile, China Unicom, China Telecom awarded 4G TD-LTE licenses

* FDD-LTE licenses for China Unicom, Telecom not yet announced

* China Mobile receives license to operate fixed-line broadband services

BEIJING, Dec 4 (Reuters) - China has awarded 4G licences to China Mobile Ltd, China Unicom Hong Kong Ltd and China Telecom Corp Ltd in a widely expected move that will benefit industry players from telecom equipment makers to Apple Inc.

The Ministry of Industry and Information Technology has issued licences for the TD-LTE standard to the country's three carriers, according to the ministry's website on Wednesday.

The announcement only mentions licenses for the TD-LTE standard, not the FDD-LTE standard which is more widely adopted globally. The licences will mostly benefit China Mobile, whose 4G network is heavily based on TD-LTE.

The ministry also awarded China Mobile a license to operate fixed-line broadband services, according to the company. Previously, only China Unicom and China Telecom were able to offer fixed-line broadband.

China Mobile, the country's largest mobile carrier by subscribers, has trailed behind its smaller rivals in attracting users to its home-grown 3G standard due to its poorer network service. It also does not have a distribution deal for Apple's iconic iPhone.

China Mobile's 3G subscribers accounted for just 23 percent of its total subscribers as of the end of October, compared with 42 and 54 percent for China Unicom and China Telecom, respectively.

China is only expected to license FDD-LTE networks - China Unicom and China Telecom's favoured standard - sometime next year.

China Mobile issued a statement on its website acknowledging the award of the 4G and fixed-line broadband licenses, adding that it would "collaborate with the supply chain to make an all-out effort to push forward the construction and operation of 4G mobile communications".

China Telecom said it would apply for a FDD-LTE licence "as soon as practicable", according to a statement to the Hong Kong Exchange.

China Unicom declined to comment.

The rollout of commercial 4G is also expected to benefit equipment makers Huawei Technologies Co and ZTE Corp as well as Chinese Internet firms.

APPLE'S IPHONE

China Mobile, the country's biggest mobile carrier, is the only one to not offer customers the iPhone as Apple did not support its proprietary 3G technology called TD-SCDMA.

Now that China Mobile has obtained a 4G licence based on TD-LTE, which is supported by Apple's latest iPhone models, it paves the way for a deal between the two giants.

But negotiations have been tricky, in part because of disagreements over details like revenue-sharing, analysts say.

The ongoing effort has fuelled Wall Street hopes that a deal would come soon, offering the iPhone to 759 million potential buyers who are China Mobile subscribers.

According to a Tuesday report on Fortune.com, China Mobile has quietly begun taking pre-orders for iPhones.

China, the world's biggest smartphone market, had 1.2 billion mobile users as of the end of October, 62.3 percent of whom are on China Mobile.

China Unicom is the second-largest with 22.6 percent of total users, while China Telecom has 15.1 percent.

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