China Telecom has applied for FDD license

Recently, Wang Xiaochu, chairman of China Telecom, said that he has applied for the FDD-LTE 4G license and is currently communicating with the government, hoping to obtain a license as soon as possible. This shows that under the circumstances of 3G subscriber growth and weak terminal market, China Telecom is striving to obtain the FDD commercial license as soon as possible.

After the issuance of TD-LTE 4G licenses in December 2013, China Telecom’s 3G subscribers were basically in negative monthly growth due to the market. China Unicom’s new subscriber data in April this year also created the lowest in five years.

According to industry analysts, after the issuance of TD-LTE 4G licenses, the development of China Telecom and China Unicom users will certainly be affected. However, given that China Mobile’s 4G subscriber growth is also not fast, 4 months of subscriber development is less than 4 million, and China Telecom and China are not excluded. Unicom made a fuss about user development data and put pressure on the authorities.

In respect of 4G investment, Wang Xiaochu expects that China Telecom will appropriately increase capital investment after obtaining FDD-LTE 4G licenses. Capital expenditure will be RMB 80 billion this year, half of which will be used for 4G services.

In terms of network coverage, China Telecom has deployed 4G test networks in more than 60 cities and is expected to cover more than 300 cities during the year. The 4G mobile phone sales target reached 36 million during the year. However, given that FDD-LTE 4G commercial licenses have not yet been issued, there is still a lot of uncertainty about whether China Telecom's network coverage and user development goals can be completed.

Regarding the recent investor and industry concerns about the company, Wang Xiaochu stated that China Telecom and China Mobile and China Unicom have established a tower facility company to avoid re-building of facilities, which will help reduce the capital expenditures of the three major operators. Since China Telecom currently has the fewest base stations, it is the biggest beneficiary of the establishment of the Tower Company.