China’s telecom ministry has stated that large-scale commercial deployment of LTE in the country will take between 3- 5 years.

This is the first time the ministry of industry and information technology (MIIT) has provided an official timeline for the country’s move to LTE.

Minister Miao Wei further told China Daily that significant rollouts were not to be expected until 2014.

China has been actively campaigning to have its homegrown LTE standard, TD-LTE, accepted globally. But most mature markets are supporting the more common FDD-LTE.

Miao declined comment on whether China would allow multiple LTE standards.

But 3G now looks set to remain the staple for China’s carriers until 2014.

The potential for 3G in China may not yet have been reached, according to figures from the MIIT. The ministry had anticipated 60 million 3G users in the country by the end of last year, but numbers stood at 47 million. Growth in 3G subscribers had largely been hampered by the lack of affordable 3G-compliant handsets.

Kevin Wang, an analyst at IHS iSuppli, told Telecom Asia that China’s carriers were likely to continue investing in 3G in order to attract users and improve ARPU.

“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,” says Wang.

Research from IHS iSuppli indicated China Mobile, which helped develop TD-LTE, would be likely be the first carrier to go forth with 4G, followed by China Telecom and China Unicom. According to Wang, China Unicom had the least incentive for LTE due to its status as China’s sole retailer of Apple’s iPhone.

TD-LTE trials are now underway in six cities in China.

Asus’ quest to increase its smartphone business has taken it far from its Taiwan headquarters, to Europe and North America. In its latest — and Asus’ T10 Android-based smartphone for China Mobile biggest — bid for phone sales, however, the company is aiming closer to home: mainland China’s China Mobile.

On Thursday afternoon in Beijing, Asus plans to announce a wide-ranging partnership with China Mobile that will make four Asus smartphones and one tablet available to the carrier’s millions of customers.

The deal is the cornerstone of Asus’ newest strategy to boost its mobile devices business. Though Asus is widely known for its computer parts, laptops and netbooks, it remains a bit player in the global cellphone and smartphone markets.

The company hopes a tie-up with China Mobile, which is both China’s largest wireless operator and the world’s biggest carrier by subscribers, will raise its mobile profile. “China will be our biggest mobile market,” said Benson Lin, Asus’ head of mobile devices, in an interview. “China is very important to our future.”

The partnership will be something of a gamble for Asus. China Mobile, like all Chinese carriers, uses a unique technology standard (TD-SCDMA) for its 3G cellular network. That means the phones Asus is providing to China Mobile — known as T10, T20, T25 and T60 — can’t be offered to any other operator.

Lin said the potential is worth the risk. Though he declined to share specific sales goals, he noted that China Mobile currently has nearly 590 million subscribers. Capturing 10% or even just 5% of that audience is “still a huge number,” he said.

Asus also believes there is room to grow. Though all handset makers are interested in China, many are waiting for the country to upgrade its networks to the 4G technology LTE, said Lin. Europe is currently Asus’ largest mobile market, but Asus anticipates China will replace it soon.

The opportunity has pushed Asus to customize its “T” series of phones to Chinese tastes. Instead of automatically connecting to Google for browsing, the devices will link to the popular Chinese search engine Baidu. And instead of Facebook, they will access the Chinese social network RenRen.

To get its tablet to work on China Mobile’s network, Asus switched the modem. Spokeswoman Debby Lee said the company had not yet decided which of its Android “Eee Pad” tablets will be offered. Asus introduced three Android and one Windows-based tablet at the January Consumer Electronics Show in Las Vegas.

All of the T phones run on the 2.0 version of China Mobile’s Ophone operating system, which is a variant of Google’s mobile platform, Android. They also utilize special processors from California-based chipmaker Marvell. The design, which combines a CPU and modem on a single chip, is more affordable, efficient and compact than systems that use two chips, said Lin. Asus expects the phones to sell for around 2,000 RMB ($300), in part because of China’s high value-added tax rate (VAT). The first phone model, T10, will launch in early March.

Developing the T phones took a year and a half of intense development at Asus’ Taipei campus, said Lin. Asus already has some phones in the Chinese market, but they are at a smaller carrier, China Unicom.

Asus’ PC products are better known in China. The company says it is the country’s No. 2 provider of laptops, having sold 20 million standalone devices there in 2010, including laptops, motherboards, VGA graphics cards and optical drives. Lin said he hopes younger, “power users” who have Asus laptops will be attracted to the new phones.

WiFi offload, earlier LTE rollout key to solving mobile data overload, according to Chinese operator; plans to deploy 1 million hotspots.
The capacity crunch caused by increased mobile data usage is as acute in China as it is elsewhere in the world, but the country’s largest mobile operator is working on solutions. Key to its plans: WiFi offload and the move to LTE.

“WiFi has proved to be a very important supplement to cellular networks,” China Mobile chairman Wang Jianzhou told a packed auditorium at the opening keynote of Mobile World Congress 2011 on Tuesday. “We plan to have 1 million WiFi hotspots nationwide in three years.”

However, Wang warned that moving traffic on to WiFi networks can affect the experience for end users, who often have problems with authentication, for example. As such, he called on the vendor community for help.

“We urge all handset manufacturers to provide [an] embedded WiFi connection and make it a default function,” Wang said.

The demand for data also means that telcos like China Mobile are looking to roll out LTE networks earlier than they had originally planned.

LTE is coming ahead of schedule, Wang said. LTE stands for long-term evolution, and operators were working on the assumption that it would be a long time coming, he explained.

“[But now,] we should call it STE – short-term evolution,” Wang said, adding that China Mobile is looking to carry out commercial trials of TD-LTE as soon as possible.

Wang also noted that TD-LTE, which runs on unpaired spectrum, is converging with FDD LTE (the more common paired variant), and predicted that single-terminal roaming “will soon become a reality”.

China Mobile had a massive 590 million subscribers at the end of 2010, 80 million of which were using smartphones, Wang said. The company has rolled out 640,000 base stations across the country, giving it coverage of 98% of the population.

While penetration in urban areas is now well above 100%, “we still see huge potential in net additions in rural markets,” Wang said.

MADRID—Spain’s Telefonica SA said Sunday that it will widen its strategic partnership with China Unicom (Hong Kong) Ltd., with each company investing $500 million to increase their cross shareholdings.

Telefonica said in a filing with regulators that it will raise its stake in China Unicom to 9.7% from around 8.4%, while the Chinese telecommunications firm will increase its ownership in the Spanish company to 1.37% from about 0.9%.

The Spanish telecoms giant said the strategic agreement and investment plan is unprecedented in China’s coveted market, which still has low penetration rates and high growth potential. The expanded agreement also comes at a time at a time when Telefonica’s mature Spanish home market is suffering from the lingering impact of a severe contraction and record unemployment.

Spain’s No. 1 telecoms firm by market value has expanded aggressively abroad, from fast-growing Latin American states and promising economies such as China, to cutthroat, mature European markets like the U.K.

The Spanish company currently has 277.7 million clients worldwide, up from 68.2 million in 2000. China Unicom, in turn, is the world’s No. 4 telecoms firm by clients, with 310 million customers. Their combined customer base equals to about 10% of the world´s population, Telefonica’s Chairman Cesar Alierta said in a statement.

“Every six months, the Chinese (telecommunications) market grows at a rate that equals Spain´s population,” adding 9 million customers on a monthly basis, Telefonica said. The Chinese telecoms market is expected to have one billion users next year, it added.

The Spanish company is the main foreign partner of China Unicom. It took a minority stake through a strategic alliance with what today is China Unicom in 2005. The two companies cooperate on mobile phone service platforms, equipment purchase, corporate telecommunications services and technology.

Under the new agreement, China Unicom will now have board representation at Telefonica. Mr. Alierta already sits on China Unicom´s board and goes to China on a monthly basis.

To boost their cross shareholdings, Telefonica will sell to the Chinese firm more than 21.8 million shares held in treasury at €17.16 ($23.36) apiece, representing the average price of the past 30 trading days. The deal will boost China Unicom’s total investment in Telefonica to $1.5 billion. Telefonica in turn, will buy China Unicom shares through market transactions over the next nine months.

China Unicom is rumored to be looking to attract 50 million new 3G subscribers this year, and has started a marketing push to reach its goal.

The company has started localized 3G marketing at two of its branches and is preparing new 3G services to help it meet its ambitious targets, a source within the company’s marketing division told Marbridge Consulting.

But Unicom, which signed up a consistent 1 million subscribers per month from May to November 2010, would need to more than quadruple this rate of additions to do so.

Unicom had 11.6 million 3G subscribers as of the end of October, according to MIIT figures. This places it second among the three main operators, behind China Mobile (16.9 million) but ahead of China Telecom (10 million).

More sources have said that as part of its drive, China Unicom has started selling the 5 million low-cost 3G handsets it acquired through a central procurement process.

The phones include models from Nokia, Samsung, Sony Ericsson, LG, ZTE and Huawei.

E-reader device allows users to access Facebook, Twitter despite censorship.
Amazon.com Inc.’s Kindle 3G e-reader is being snapped up on China’s gray market as it has an extra special advantage for customers–it automatically leaps the so-called “Great Firewall” of state web censorship.

Sites such as Facebook and Twitter, which are blocked by the Beijing authorities, can be accessed without interference by the Kindle’s Internet browsing function, the South China Morning Post reported Monday.

Amazon says it isn’t able to ship the Kindle to mainland China or offer content in the country, which has the world’s largest Internet community at more than 420 million web users, the Post reported.

However, a seller in Beijing told the paper he slipped them into China a few at a time after having them delivered to an address outside the mainland. He has sold 300 in the past month.

Dozens of Kindles are available on web auction site Taobao–China’s answer to eBay–with prices ranging from a special offer of CNY700 ($105) to CNY5,000.

Several Chinese bloggers are recommending the device, according to the paper, largely due to the fact it can “scale the wall automatically.”

“I still can’t believe it. I casually tried getting to Twitter, and what a surprise, I got there,” the paper quoted a mainland blogger as saying.

“And then I quickly tried Facebook, and it perfectly presented itself. Am I dreaming? No, I pinched myself and it hurt.”

The 3G Kindle uses global system mobile communication technology, which gives WiFi coverage in more than 100 countries, including China. The WiFi-only Kindle would rely on a local Internet connection.

Professor Lawrence Yeung Kwan, of the University of Hong Kong’s electrical and electronic engineering department, told the paper that mainland Internet patrols might have overlooked the gadget.

“Every Kindle device is pre-registered to a personal account, so every user’s information is clear,” he said.

“In addition, Kindle has a book-buying focus, so the censors may think these connections are relatively safe.”

The Kindle has its own network, called Amazon Whispernet, to provide wireless coverage via AT&T Inc.’s 3G data network in the U.S. and partner networks in the rest of the world.

A 3G wireless coverage map on Amazon’s website includes numerous Chinese cities, suggesting its 3G link involves a Chinese carrier, the paper said.

Google Inc., owner of the world’s most popular search engine, said China remains a very important market for the company and there is “huge potential” for it to win sales by aiding small local companies with global marketing.

“Google is a global company and we have built a platform that can help facilitate Chinese businesses expanding overseas,” John Liu, vice president for China, said at a Stanford University-sponsored conference in Beijing today. “There is a huge number of small- and medium-sized businesses in China and there is huge potential for us to help them.”

Google is adding employees and ramping up efforts to win new advertisers in China seven months after a clash over censorship caused it to shut down its Google.cn website in the nation, the world’s largest Internet market. In March, the Mountain View, California-based company started redirecting users to a Hong Kong site, after saying it was no longer willing to comply with online censorship rules.

China requires locally based websites to censor content on topics such as the Tiananmen Square crackdown in 1989 and Tibet independence that are deemed unacceptable to the ruling Communist Party.

Liu, addressing the conference in Mandarin, said China is “a unique market” for the Internet, without referring directly to the company’s dispute with the government over censorship.

Google’s license to operate in China was renewed in July, and the company expects it to be renewed again next year, barring a change in posture from Chinese officials, Chief Legal Officer David Drummond said this month.

Global Internet and mobile-phone use will more than double over the next 10 years, Liu said today. Worldwide wireless users will rise to 10 billion from 4.6 billion, he said. Internet users will rise to 5 billion from 1.8 billion, according to Liu.

Oct 13, 2010 (San Jose Mercury News – McClatchy-Tribune Information Services via COMTEX) — BEIJING, China — The store clerk polished the iPhone 4 as though it were a diamond. Then he reverentially handed it to Liu Jia.

“You have to have it. It’s like religion,” said Liu, a 29-year-old public relations manager. “I don’t think a lot of people understand the essence of the iPhone, but it looks cool and it makes you a star in front of your friends.” Apple infatuation has officially arrived in the land of 800-million-plus mobile phone users.

The recent launch of the iPhone 4 on mainland China created a frenzy, with fighting breaking out among shoppers at Apple’s flagship store, located in a high-end shopping and bar area of Beijing called Sanlitun. The store had to be closed to restore order. Shortly after the latest version of the iPhone officially went on sale Sept. 25, Apple’s carrier partner, China Unicom, announced it had received 200,000 pre-orders, even though the country is already swamped with “grey market” iPhone 4s brought in from Hong Kong and the United States.

Compared with Americans and consumers in other developing countries, relatively few Chinese lined up for Apple products. But the intensity of those that do underscores the importance high-end products mean to newly wealthy Chinese, many of whom are willing to pay above suggested retail prices to get their hands on devices like the iPhone 4 before others do.

Cupertino-based Apple, after years of effectively ignoring the country with the world’s largest number of mobile phone and Internet users, is now aggressively courting Chinese consumers. Products like the iPhone and iPad are hitting the Chinese market faster than ever before — the iPhone 4 went on sale just about three months after its U.S. release while it took more than two years between the debut of the first version of the iPhone and its rollout in China.

And the recent opening of the Apple Shanghai store, featuring a stunning 40-foot-high glass cylinder, is part of a new retail strategy to open 25 stores in China by the end of next year, a dramatic increase from the four that now exist — two in Beijing and two in Shanghai.

During the company’s second-quarter conference call with analysts, Chief Operating Officer Tim Cook said revenue for China, Hong Kong and Taiwan were nearly $1.3 billion — a more than 200 percent jump from the same period a year ago. Piper Jaffray analyst Gene Munster estimates China represents about 5 percent of the company’s sales and expects that to double some time between 2015 and 2020. And Apple’s shares topped $300 Wednesday, in part on investor excitement over its growth here.

Apple would not comment on its China strategy.

“It’s critical that Apple is in China,” Needham & Co. analyst Charles Wolf said. “There is a strong move toward conspicuous consumption and that means there is a strong move to buy Apple products.” The iPhone conveys status in a status-conscious culture.

“It’s pretty,” said Zhang Ya Nan, a college sophomore who visited an Apple reseller just to touch an iPhone, which she planned on buying with help from her mother. “I don’t want to wait too long.” It’s not uncommon for Chinese to spend two months’ salary — or more — on an iPhone, which costs about $750 for a 16 gigabyte model without a China Unicom contract, though the relative scarcity of the devices has driven the price up among scalpers and resellers. Consumers can also get a 16 GB iPhone 4 with a two-year contract that costs about $880. Some Chinese don’t even use the device as a phone because it’s too expensive for them to make calls; instead, it’s used to send text messages, said Shaun Rein, managing director of Shanghai-based China Market Research Group.

“They use the iPhone as a status symbol to show their sophistication in the world, even though they can’t afford it,” he said.

Apple’s lure goes beyond the iPhone. Wen Diren, along with his wife, Shi Guoling, visited the Sunlitun Apple store last week to check out the iPad. “I just came to try it out and I fell in love with it,” he said, cradling the new 16 gigabyte iPad he bought for a little less than $600, about $100 more than what the device sells for in the United States.

Like all infatuations, though, there is a risk the attraction is temporary — or that obstacles could impede a long-term relationship.

“Apple hasn’t learned how to tackle markets that have very different characteristics from the United States,” Shanghai-based Gartner analyst Sandy Shen said.

Among the difficulties Apple faces in China, for example, are competing with easily made iPad and iPhone knockoffs and marketing its high-priced products to a population that has a much lower income than consumers in more developed countries like the United States.

“There are a lot of shanzhai,” or fake mobile phones, said Jixin Huang, investment manager with expertise in China’s mobile market at Innovation Works, an early-stage start-up venture fund. “They are everywhere.” Apple will also face strong competition from phones running on Google’s Android mobile operating system, whose aggregate market share is already higher than that of the iPhone in China, Shen said.

Apple is used to having its way in every market it enters, but in China the company must contend with a government that does not hesitate to dictate its wishes to foreign companies, Piper Jaffray analyst Gene Munster said. When the iPhone first came to China, for instance, government officials mandated that the device could not be equipped with WiFi. That rule has now changed.

“Apple has great products the whole world wants,” said Rein with the China Market Research Group. “But Steve Jobs looks at America too much. The company is too Ameri-centric. This is a complaint you hear throughout the world.” For now, though, Chinese consumers are riveted with Apple’s splashy presence in Beijing and Shanghai.

Every day, Apple’s split-level, glass-walled Sanlitun store is packed with jostling shoppers. Young Chinese, like fixated gamblers, press around tables filled with iPhones, iPads and MacBooks.

Most visitors to the box-like store, though, seem content to just gaze at the gadgets.

New iPad owner Wen believes Apple’s sleek design has a good chance of winning over the masses. But, he added, “We still have to wait and see.”

BEIJING—China has become one of the biggest sources of games for mobile devices like the iPhone and social-networking sites like Facebook. But software developers here are finding it difficult to make profits in their home market.

Rampant piracy and the smaller reach of distribution systems like Apple Inc.’s App Store have curbed profits in China’s nascent “app” market, even though the country has the largest cellphone market by subscribers and more Internet users than any other nation.

Developers say Apple’s App Store is hampered in China because of language and payment restrictions. The interface is in English and users must have credit cards that work for both dollar and yuan transactions—which many Chinese don’t have—to set up an iTunes account. Meanwhile, Chinese social-networking sites, which only recently opened their platforms to outside app developers, charge high commission fees.

Social games and iPhone development are “really suited for Chinese teams,” said Frank Yu, chief product officer at Kwestr, a Shanghai-based software start-up. “There’s a low capital base to get into this type of development work. A team of five to 20 engineers can design an iPhone app with little more than $100, a computer and an iPhone.

Apple and sites like Facebook Inc. typically give 70% of revenue from app sales or advertising to their creators, but Chinese platforms will often share only 50% or 40%, Mr. Yu said. “It makes good business sense to go abroad,” he said. “Not only do they get better revenue” when they develop in English, “but they’re going to a bigger market” because they can reach users in more countries.

Some Chinese developers have been successful overseas. For example, Beijing-based Rekoo Media has created the virtual-farming game “Sunshine Ranch,” which has more than 600,000 monthly active users on Facebook. The company has also created some of the most popular games on social-networking sites in Japan and Korea.

Liu Yong, Rekoo’s chief executive, said the company has released its products both in China and overseas, but generates only 30% of its revenue from its home market. “The Chinese market could be a very profitable one in two to three year’s time, but currently, developers are facing way too many problems” including with piracy, he said.

Shi Weixing, chief executive of Beijing-based developer 9thQ Games, said it takes far more research to develop an app in English for a foreign audience, and while the firm prefers to develop products for Chinese users, there is no platform in China where developers can get reasonable payment.

“The Chinese market is one with high potential because of large demand, but many developers have to go abroad due to the immaturity of the market,” Mr. Shi said.

To be sure, with some 400 million Internet users in China, the online game market here is attractive for game companies despite its challenges. Beijing-based developer Zhang Shang Ji Hao Information Technology Co., for example, pays a 70% commission fee to publish its games through the online game portal of China’s Tencent Holdings Ltd., because of the site’s massive number of users.

U.S. developers are moving into China as well. Zynga Game Network Inc., a San Francisco based social game maker, earlier this year acquired Beijing-based social game company XPD Media. The move marked a first step into the Asian market for Zynga—whose “FarmVille,” in which players grow crops and raise livestock, is one of the most popular games on Facebook. Zynga also said it made the move to bolster its talent in game development for its players world-wide .

Meanwhile, Seattle-based PopCap Games Inc., the creator of games such as “Bejeweled” and “Plants vs. Zombies,” is planning to release games in Chinese soon, despite challenges the company faces with piracy. “Plants vs. Zombies” is popular in China, despite not being officially available in Chinese. James Gwertzman, PopCap’s vice president for Asia Pacific, said the game has spread through “distribution of pirated copies.”

Mr. Gwertzman added it may be difficult to find ways to profit from game sales in a market where users are accustomed to playing for free, but the company has been developing its own platform to address that, which has launched in Korea. “The biggest difficulty in China for distribution” is finding “legal mechanisms to actually monetize content,” he said.

Developers say adoption of high-speed mobile services, and the launch of Apple’s iPad and the iPhone 4 in China earlier this month, may eventually bolster use of legal app distribution platforms in China.

“The market is still large and attractive enough that you’re going to see developers targeting the Chinese market than you have in the past,” Mr. Gwertzman said.

BEIJING—China Unicom (Hong Kong) Ltd. said its supply of Apple Inc.’s iPhone 4 handsets is insufficient to meet user demand but that it will increase its supply as quickly as possible. Sales of the model started at a much faster pace than when older versions of the iPhone went on sale in China last year.

Unicom had received more than 200,000 iPhone 4 preorders by early Saturday, the day sales started, and more than 40,000 buyers received the phone and a bundled mobile-service plan that day, Unicom said. By comparison, Unicom last year sold 100,000 iPhone handsets in roughly six weeks after officially introducing the devices in China in late October.

IPhone 4 shoppers line up outside an Apple store in Beijing Saturday.
.The latest version of Apple’s popular smartphone was widely awaited in China and could help Unicom attract more users to its third-generation mobile services, which are more expensive but offer faster data speeds than typical services. Unicom, the only network operator in China to offer the iPhone, is competing with rivals China Mobile Ltd. and China Telecom Corp. to build its 3G subscriber base.

An Apple spokeswoman said more iPhones will be available soon and that customers should check online or with local stores regarding availability.

The faster start to iPhone 4 sales comes as Apple has started shortening the time between introducing its devices in the U.S. and China. The iPhone 4 went on sale in China about three months after its introduction in the U.S. and several other countries in late June. That compares with a lag of 28 months between the original iPhone’s U.S. introduction and the first authorized iPhone sales in China, and a gap of more than five months for the iPad, which went on sale in China earlier this month.

.Apple is looking to increase product sales and promote its brand by opening more of its retail stores in China. It opened two stores over the weekend, doubling its total in the country, as part of plans to add a total of 25 by the end of next year.

Unicom didn’t give details on its stock of the iPhone 4, but network operators elsewhere have also faced tight supply. Telstra Corp.’s Hong Kong unit, CSL Ltd., said in August it faced challenges delivering the iPhone 4, citing high demand. In the U.S., high demand for the iPhone 4 in late June led operator AT&T Inc. to stop taking new orders on the first day of preorders, citing processing problems. Apple apologized to customers who were turned away due to insufficient supply.

As of the second quarter, Apple was the fifth-largest smartphone vendor in China with 7.1% of shipments, according to Beijing research firm Analysys International. Nokia Corp. had the largest share with 26.7%.