China Mobile's TD-LTE bidding: next year the scale will exceed 60 billion

After the Ministry of Industry and Information Technology has determined the TD-LTE frequency band plan, the results of China Mobile ’s first TD-LTE tender have also been announced.

On October 17, the reporter learned from equipment vendors that China Mobile had notified each equipment manufacturer on October 12 that it had targeted Beijing, Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen, Xiamen, Qingdao, Tianjin, Shenyang, Ningbo, Tender results of TD-LTE wireless network equipment in 13 cities including Chengdu and Fuzhou.

This is the first time that China Mobile has held a TD-LTE tender called a quasi 4G network, which attracted 9 manufacturers including ZTE, Huawei, Ericsson, Nokia Siemens Networks, Aran (Shanghai Bell), Datang, Putian, Fenghuo, and Xinyoutong. , Involving 20,000 base stations (approximately 56,000 fans), with an amount of about 4 billion yuan.

Although the amount of tenders for operators with tens of billions of dollars is not too large, a person from the equipment supplier told reporters that the demonstration significance of the first tender is very important to equipment manufacturers in the TD-LTE market The brand on the market and the future pattern will have an impact.

ZTE and Huawei account for the largest proportion

After the announcement of the bidding results, ZTE Corporation announced that it will undertake the construction of China Mobile's TD-LTE network in Beijing, Tianjin, Guangzhou, Shenzhen and Shenyang, with a total carrier frequency (carrier fan) of more than 13,000 , And said to become China Mobile's largest supplier of LTE equipment.

Informed sources told reporters that in fact, in the bidding of 13 cities of China Mobile, ZTE and Huawei are indistinguishable. ZTE's "largest LTE equipment supplier" statement is to put it in China Mobile Hong Kong TD- The gains from the LTE bidding are also counted. In China Mobile's 4G network construction in Hong Kong, FDD-LTE and TD-LTE technologies each accounted for 50%. The former was won by Ericsson, while the latter was included by ZTE. ZTE built about 1500 base stations for the network.

According to sources of equipment vendors participating in the bidding, Nokia Siemens Networks and Fiberhome have the highest bids in the 13 cities bidding of China Mobile, which is also reflected in the market share they finally obtained. Their share is only single digits. The two lowest bidders are Datang and Shanghai Bell.

"Overall, there is no desperate bargaining situation, everyone is more sane. Among them, the quotations of ZTE and Huawei, which are highly concerned, are in the middle reaches. The gap between the two is also very small, and ZTE is slightly lower." Source said.

People familiar with the matter said that since it was China Mobile ’s first tender, for the sake of strengthening the industry chain, the overall principle of the operator is that the participating manufacturers, if they meet the basic conditions, will gain something, "let everyone have enthusiasm." If we exclude the upgrade from the existing TD-SCDMA, the gap between several major manufacturers is not as obvious as the final figures reflect.

In the bidding for a total of more than 20,000 base stations, three cities including Guangzhou, Shenzhen, and Hangzhou included smooth upgrades from China Mobile ’s existing 3G network, which accounted for about one-third of the total bidding. The 3G networks in these cities were built by Huawei and ZTE in the past, which pushed up the percentage of Huawei and ZTE that won the bid.

Another thing worth noting is that in the TD-LTE bidding of 13 cities, none of the cities was won by a single equipment vendor. For example, Shenzhen has Huawei and ZTE; Hangzhou has Huawei and Datang; Guangzhou has ZTE, Ericsson.

At present, the relevant manufacturers are negotiating with the provincial branches of their winning cities on equipment configuration, etc. Considering that there are two or more equipment suppliers in each city, the division of labor among the suppliers is also An important discussion. "It has not been completely determined yet, but it tends to be divided into regions by equipment vendors, and operator management and technical switching of equipment from different manufacturers are repeated." The above-mentioned equipment vendor said.

The scale of investment next year is about 60-70 billion yuan

"For equipment manufacturers, after the first round of bidding, there are only 20,000 base stations, and the difference between the two shares is not very important. After all, it has just begun, which has a greater significance for the future TD-LTE market pattern. "The person from the equipment supplier said.

Chang Gang, chief marketing officer of Ericsson China, told reporters that if China's TD-LTE market is officially launched, the market value of system equipment brought by each year will reach tens of billions of yuan.

Regarding the timetable for the launch of the Chinese TD-LTE market, there is currently no clear statement from the official. Miao Wei, Minister of Industry and Information Technology, said in September this year that TD-LTE licenses will be issued in about a year. China Mobile ’s external statement is that 200,000 TD-LTE base stations will be built next year, and more than 100 cities will be built.

In an interview with reporters, Gu Xiang, deputy general manager of ZTE China, predicted that the bidding for 20,000 base stations in 13 cities will be around 4 billion yuan, and the bidding for 200,000 base stations next year will exceed 20 billion yuan. This is only part of the wireless equipment. If the core network, power supply, antenna, transmission, business platform, etc. are added, the market is expected to reach 60-70 billion yuan.

"If ZTE can account for a 30% share in it, it will undoubtedly be a great benefit to the performance." A person in the telecommunications industry believes that no matter which equipment manufacturer, the Chinese TD-LTE market is launched A coveted new growth point, especially for ZTE, which has just released a huge loss in the third quarter, this market is even more precious.

Gu Xiang told reporters that because it is difficult to find a frequency band below 2.6GHz, the Ministry of Industry and Information Technology has no way to plan the TD-LTE frequency band in the 2.6GHz band (2500-2690MHz). But in this way, due to the higher frequency of this band, the coverage of a single base station becomes smaller. In the future, operators will inevitably build more base stations, and their network construction costs will increase.

He expects that if compared with the 700MHz frequency band used by the radio and television and the military and the 900MHz frequency band used by GSM, the network construction cost of the 2.6GHz band will double.

However, Gu Xiang believes that for equipment manufacturers, in any case, the launch of the Chinese TD-LTE market has an accelerating effect on the entire industry chain. Prior to this, although many operators around the world have begun TD-LTE network construction However, the scale is relatively limited. "Operator investment is small, which will bring pressure on the cash flow of equipment and terminal manufacturers, so they dare not invest, and large-scale investment in the Chinese market is the beginning of a positive cycle of the industrial chain."

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