See also: Mobile Internet (Aug’11) which is a total update on Aug 26, 2011 with a lot of additions to the original July 19, 2010 content on the following subjects:
– LTE and LTE Advanced — HSPA Evolved (parallel to LTE and LTE Advanced) — Heterogeneous networks or HetNets — Femtocells and Picocells — Qualcomm innovations in all that — Ericsson’s LTE Advanced demo — Current roadmaps on evolutions of current 3G+ broadband mobile networks
A small news item on DigiTimes last week has gone around the technical web quite fast: China Mobile to expand 4G network trial operations [16 July]
China Mobile Communications will expand the trial operation of its 4G networks in the fourth quarter of 2010 and a successful run of the trials may push China Mobile to start rolling out its 4G infrastructure in 2012, 2-3 years ahead of its original schedule, according to industry sources.
- Latest update: China-version iPhones to adopt China Mobile TD-LTE technology, says paper [May 23, 2011] (emphasis is mine)
China Mobile Communications has reached a consensus with Apple under which the next-generation of iPhones to be sold in China will adopt TD-LTE technology developed by China Mobile, the Chinese-language Commercial Times quoted the China-based carrier’s chairman Wang Jianzhou as saying.
China Mobile has begun voice testing on its TD-LTE experimental networks in Shanghai and commercial operations of the 4G networks in China are expected to begin in 2012, the paper said.
By 2012, China Mobile also plans to set up over 40 experimental networks, 10 commercial networks and 20,000 base stations globally to promote the adoption of the TD-LTE technology, the paper added.
- Update: the rollout could begin even earlier
– China Mobile considering launch of TD-LTE services ahead of schedule [Dec 14]
– China market: China Mobile to set up TD-LTE trial networks in six cities, says media [Nov 2] comes with the information that “China Mobile will invest 1.5 billion yuan (US$225 million) to establish trial networks of its self-developed version of LTE, TD-LTE (time division-Long Term Evolution), covering a total of 3,060 base stations in six large cities in China, according to China-based media CCTTR World Communications. The six large cities are Beijing in the northern region, Shanghai and Nanjing in the eastern region, Xiamen in the southeastern region, Guangzhou and Shenzhen in the southern region, the source indicated.”
– China Mobile: 4G network coming soon [Sept 15] is stating that “4G data card is close to debut and the carrier and partners are working on the research of 4G handset chip … China Mobile is expected to launch 4G mobile communication services as early as 2011 to boost its high-margin data services, according to the GSM Association.”
– China Mobile to set up device sourcing company [Sept 17] is telling that “The planned device-sourcing company will begin to purchase TD-SCDMA-enabled feature phones with prices below 1,000 yuan (US$148) at the end of the year and then shift to smartphones priced below 2,000 yuan [with the above mentioned 4G handset chip I would assume] in the first half of 2011“.
- For background information on these technologies see: Mobile Internet
- For background information why such an extraordinary acceleration effort is needed see: Could China close the gap in mobile Internet? It should! [July 19]
- For background information regarding Huawei’s contribution to the Shanghai World Expo’s TD-LTE Demo Network see: Winners–TD-LTE connecting World Expo (PDF) and Winners–The brilliant debut: TD-LTE elevates experience at World Expo (PDF), both are from Huawei’s WinWin E-Zine Issue 6 [Aug 10, 2010 — text only HTML versions: the first and the second].
More information has become available from TMC, last week as well: China Mobile, Huawei roll out China’s first 3G/4G-integrated trial network [July 16]
China Mobile (CHL.NYSE; 00941.HK) and Chinese mobile equipment and network solutions provider Huawei Technologies have finished the first TD-SCDMA/TD-LTE outfield test and completed a series of tests and verifications in Wuxi, Jiangsu province.
The tests show that the 3G/4G-integrated network and smooth evolution are completely feasible.
… the technology will be tested in three Chinese mainland cities in the final quarter of the year, with 100 base stations constructed and 5,000 people invited to use the service.
At the beginning of the trial operation, China Mobile will offer data cards to the users and provide them with smartphones.
Results drew from such tests may facilitate China Mobile to offer 4G services in 2012, earlier than previously expected 2014 to 2015.
An insider at the Ministry of Industry and Information Technology revealed that China Mobile will select three coastal cities to pilot the TD-LTE networks, and Qingdao, Xiamen, Zhuhai, and Wuxi are all candidates.
The insider believes that 2G, 3G and 4G services will all be available to Chinese telecom service subscribers at the same time in future [emphasis mine], rather than high-grade technology substituting the lower-grade options.
A UK report from a day earlier has indicated foreign operator and supplier interest as well: TD-LTE 4G Sweeping the Wireless Broadband Markets in China [July 15]
… a variety of wireless operator companies have actually started shifting to TD-LTE, inside and outside China. Two of the main users recorded are Qualcomm and Yota. … This new technology is expected to hit the markets within two years, after a series of field tests.
Ulf Ewaldsson, Ericsson VP, said, “The Ministry of Industry and Information Technology and China Mobile will start large-scale field tests in the fourth quarter of this year. Ericsson will also take part”.
Ericsson’s strong commitment and technical readiness has already been demonstrated a week ago indeed: First complete TD-LTE solution showcased [July 12]
At a China Mobile event in Shanghai, China today, Ericsson (NASDAQ: ERIC) showcased its complete end-to-end TD-LTE solution for the first time. Together with ST-Ericsson devices, the system successfully showcased super-fast mobile broadband applications such as video on demand (VOD) and video streaming using a live camera.
… ST-Ericsson, a leader in wireless platforms and semiconductors, was the first in the world to demonstrate a handheld LTE device and to achieve LTE and HSPA mobility with a multimode device [emphasis mine]. Available next year, ST-Ericsson’s next generation modem will support both versions of LTE, in addition to TD-SCDMA and HSPA+/EDGE [emphasis mine]. With ST-Ericsson’s products, Ericsson is now the only player with complete end-to-end TD-LTE capabilities in the industry.
- Important addition: TDD-LTE equipments by Q1 2011: Ericsson [July 24]
NEW DELHI, INDIA: Ericsson in its claim has shortened the time period for availability of TDD (time division duplex)-LTE equipment from 2013 end to first quarter of 2011.
Per Thorzell, head, radio Access Network, Ericsson India added that Ericsson also did a TDD-LTE trial run in India using 20 Mhz spectrum and achieved a download speed of 71 mbps per second. … “There are approximately 95 per cent functional similarity between TDD and FDD-LTE. Therefore chipsets that support FDD-LTE will also support TDD-LTE,” … to support TDD-LTE, Ericsson feels there will be dongles as access devices in the first half of 2011 and later handheld devices.
Of the two companies mentioned in the above UK article Yota is a Russia-based mobile operator expanding to other countries worldwide, while Qualcomm is the most influential wireless telecommunications research and development company, as well as the largest fabless chip supplier in the world.
Qualcomm has a unique role in the possible 2-3 years acceleration of the TD-LTE technology. The Casino Royale: The story of Qualcomm [July 12] article from July 16 issue of Forbes India, republished on-line by moneycontrol.com, “India’s No. 1 financial portal” has been summarized on the cover as:
Qualcomm is one of the great technology companies of our times. Its products drive large parts of telecom networks everywhere. Everywhere, except India. Now after almost a decade of trying to open up the Indian market, Qualcomm’s time might finally be here. And it will all because of what Qualcomm learnt in China.
Going into the article one can see what made Rohin Dharmakumar, the author of the article to arrive to such a conclusion. Some excerpts from the point of view of our subject:
They [Qualcomm] had invented a proprietary technology that became the seed for the wireless standard CDMA … CDMA began to be adopted by the world’s mobile operators from the mid-90s after years of relentless hard-selling … , backed up by equally relentless patenting by … engineers in the R&D department. … Today, the company … sits on a pile of over USD 18 billion in cash while generating another USD 2-3 billion in free cash flows every year!
Qualcomm’s model as it exists is simple. Be inventive, file as many patents as possible in wireless communication, and then build products around those or wait for people to queue up to use those patents and pay a nice royalty to the company.
… Qualcomm’s patents are critical to almost all major wireless standards on the GSM, CDMA and even LTE (Long Term Evolution) sides, helping it squeeze a royalty out of quite literally anyone and everyone. An army of its lawyers and patent experts go after any company that dares touch its wireless IP without paying for it.
… The first star that heralded its new fortune was the successful completion of India’s 3G auctions. Because Qualcomm’s IP is embedded in all 3G technologies, it will make a 4-5% cut off every 3G phone that will now be sold in India.
… The second omen was on March 11, at a press conference in New Delhi’s Oberoi hotel, when Kanwalinder Singh, its India head said, “Today I’m very proud to announce that Qualcomm has invested one billion US dollars into India.”
Singh did not spend that money in building offices, hiring thousands of new employees or buying local businesses. He spent it to buy 20 megahertz (MHz) of spectrum in the cities of Mumbai and New Delhi and the states of Haryana and Kerala. Qualcomm was one of the six companies that won precious spectrum to offer high speed “4G” wireless broadband to Indians. The $1 billion spent in India was its single largest bet anywhere around the world.
The funny thing though is that Qualcomm is betting on deploying a technology that it didn’t think much of to begin with, a commercially unproven technology called TD-LTE originally developed by the Chinese.
Learning from the Chinese
The Chinese government, in the mid-90s, decided to develop a technology to avoid paying royalties to Western companies like Qualcomm. They created TD-SCDMA, a 3G wireless standard. But it never really took off*. The Chinese, in order to avoid paying royalties, had to reinvent the wheel. This made their technology cumbersome and inefficient.
* Personal note: TD-SCDMA in fact took off in 2009, and that was just too late only for international acceptance (being a 3G technology). See the 3G China customer base chart in my earlier OPhone OS (OMS) 2.0 based on Android 2.1 [July 5] article.
The Chinese pumped more resources into it and refined it into TD-LTE. They also roped in two large Western partners, Verizon and Vodafone, to conduct joint trials of LTE combing the Western (FD) flavour with its own (TD) one. Julian Grivolas, an analyst with Ovum in Paris who tracks the LTE space closely, says China’s goal was to make sure that this joint LTE becomes the next equivalent of the mobile world’s ubiquitous GSM standard.
But the company that took advantage of this trend the fastest was the one which was the last to join the LTE party — Qualcomm. For that it had to swallow its pride and abandon Ultra Mobile Broadband (UMB), a 4G technology it had been developing for many years. In late 2008, it abandoned UMB to focus exclusively on LTE when it saw big operators tilting towards it. A few years earlier it had already spent over USD 800 million to acquire Flarion, a company with a significant amount of patents in areas related to LTE.
Qualcomm smartly co-opted its erstwhile foe China into becoming an ally by announcing plans to build new “multi-mode” mobile chipset** that would combine the version of LTE that Qualcomm and a galaxy of mobile companies like Ericsson and Nokia had developed along with what the Chinese had developed [emphasis mine].
** Personal note: see Qualcomm Introduces World’s First Complete Multi-mode 3G/LTE Integrated Solution for Smartphones [Feb 16, 2009], Qualcomm Now Sampling Industry’s First Dual-carrier HSPA+ and Multi-Mode 3G/LTE Chipsets for Global Markets [Nov 12, 2009] and Qualcomm to launch TD-SCDMA and TD-LTE next year [Nov 19, 2009]. Update: Qualcomm Now Demonstrating Products Based on LTE TDD Technology — Company on Track with Commercialization of Products Based on LTE TDD Technology with First Devices Expected in Mid-2011 [Sept 8, 2010]. At the same time we had news that Qualcomm now has 4G licensing deals with the big three [Nov 16, 2009]: Qualcomm told its investor meeting that LG has joined Samsung and Nokia in agreeing to pay to use its technology in future 4G products. “This means they have 65% of the handset market signed up to long term royalty agreements [emphasis mine],” JP Morgan analyst Steven O’Brien told Reuters. “We have more certainty in the royalty streams and cashflow streams from the major handset vendors.”
Given that a significant chunk of TD-LTE patents rest with Chinese companies like China Mobile, Huawei and ZTE, the only way Qualcomm would have integrated them into its own offerings would be by cross-licensing*** — basically sharing patents with them. The Chinese are returning the love because a global acceptance of TD-LTE will mean cheaper equipment prices for its mobile operators and larger markets for its equipment vendors.
*** Personal note: There is no information regarding these cross licensing agreements, although they definitely exist. We only know that the Chinese were quite successful in licensing negotiations even before. See CDMA success brings Chinese royalty gripes [Feb 12, 2009]: “… in 2000 Irwin Jacobs [the father of current CEO] negotiated government permission for CDMA to be used in China, Qualcomm granted Chinese manufacturers the best rates in the world — around 2.65% as opposed to 5% for other makers. (Qualcomm neither discloses nor confirms its royalty rates).”
Such an advantage even prompted the following: “In fact, outside of China, TD-SCDMA is generally dismissed as a negotiating ploy by China to obtain acceptable patent cross licensing agreements with Qualcomm, Ericsson and the like.” – see An update on TD-SCDMA, China’s 3G technology [Oct 18, 2007]
With TD-LTE under his belt, [Paul] Jacobs [their CEO] knew he had WiMAX cornered.
In addition to that it is also worth to note that LTE is Changing the Landscape of IPR Wealth [May 18, 2010]:
… the 2G, 3G, and 3.5G IPR [Intellectual Property Rights] landscape was dominated by Qualcomm, Nokia, and Ericsson … “While Interdigital and Qualcomm are clear leaders in the global LTE patents portfolio with 21% and 19% market shares respectively of the total number of patents, Huawei comes in third position with 9%, Samsung in fourth with 8%, and Nokia, LG, and Ericsson in joint fifth place, each with 7% market share,” [said Malik] Kamal Saadi [, principal analyst at Informa Telecoms & Media].
… Until now only a third of current global LTE patents could be described as essential but about 60% of them are recognised as having the potential to become essential in the future. Whether or not a patent is viewed as being essential could also vary from one market to another. For example, from the 182 LTE patents contributed by Huawei, 178 are registered in China and only a handful of these could currently be described as essential. …
… Informa Telecoms and Media believes that more than 60% of LTE patents from likes of Qualcomm and Nokia, 50% of LG’s portfolio, 40% of Samsung’s patents, and less than 33% of Ericsson’s portfolio could be described as essential LTE patents so far.