China Small Cell Market Update August 2014

Chinese FlagIt's been a while since we looked at the state of the Small Cell market in China. 3G small cells didn't take off there as hoped. In this update, we find that there is a huge potential opportunity for Enterprise TD-LTE small cells but that without VoLTE, operator interest may be skewed more towards dual-mode TD-LTE/TD-SCDMA products.

We also discover some unusual technical variations in China, specifically related to the way voice calls are handled in 4G and the prioritisation of the different timing sources.

The huge size of the Chinese Mobile Marketplace

The three Chinese national networks operate on a size and scale not found elsewhere. Serving a population of over 1 billion, China Mobile dominates the market. Mobile subscriptions reported by GSMA Intelligence at end 2013 were:

 Network  Mobile Subscriptions Mobile Revenues
 China Mobile  726 Million  $90 Billion
 China Unicom  251 Million  $21 Billion
 China Telecom  168 Million  $15 Billion

This makes China Mobile the largest individual mobile network operator worldwide, even allowing for multi-national conglomerates such as Telefonica. American Moviles or Vodafone. Revenues per user are much lower though at around $10/month.

China Mobile has been held back by government insistence that they use a locally designed 3G variant called TD-SCDMA rather than the world standard WCDMA that their competitors were licenced for. Despite heroic efforts, it hasn't succeeded outside China and will be quickly overtaken by LTE.

Spectrum allocation for 4G was allocated in December 2013 as follows:

 Network  Total 4G
Bandwidth
 Assigned Frequencies
 China Mobile  130 MHz  1800-1900, 2320-2370, 2575-2635 MHz
 China Unicom  40 MHz  2300-2320, 2555-2575 MHz
 China Telecom  40 MHz 2370-2390, 2635-2655 MHz

China Mobile is divided into about 20 provinces, each with its own China Mobile operator business, many larger than national operators elsewhere, and with strong oversight from head office. There's quite a bit of competition between individual provinces, leading to fast track programs to trial and rollout new technology and best practice.

China Mobile's LTE rollout

For 4G, the regulator again forced China Mobile down the TD route, mandating the TD-LTE variant of the standard. This time there has been much greater interest from the outset, and the technology will be used elsewhere. Japan (e.g. Softbank), India, US (e.g. Sprint/Clearwire) and Europe (e.g. BT in the UK) will quickly become markets for the technology, which is very similar to FDD mode except at the radio interface.

China Mobile has intensively deployed TD-LTE macrocells at the rate of 200,000 per annum, aiming for some 400-500K operational by the end of 2014. These would mainly but not entirely be co-located with their existing cellsites and towers.

TD-LTE macrocells mostly use frequency Band 38 (approx. 2570 to 2620 MHz), and with this number of cellsites already provide pretty good outdoor service. This is the same band allocated in Europe and elsewhere, so there is plenty of device support for it.

Band 40 (2300 to 2400MHz) has been allocated for in-building small cells, although with 130MHz total spectrum to play with China Mobile may also use this and other frequencies nearby.

Mobile device support

One variant of the Apple iPhone 5C and 5S supports TD-LTE in Bands 38, 39 and 40 and despite a premium price, these remain a popular iconic brand throughout the region. Until now, China Mobile Apple users had to stick with 2G and Wi-Fi service only.

Most TD-LTE devices in China support a fully concurrent dual-mode, meaning that they can simultaneously be connected to both 2G and 4G. VoLTE (Voice over LTE) isn't used yet, so all calls are notified and handled via 2G or 3G with each smartphone continuously monitoring for incoming calls.

Surprisingly, the Apple iPhone is one of the few exceptions which only supports CSFB (Circuit Switched Fall Back), where incoming calls are notified via 4G but connected by 2G or 3G. CSFB is the most common method for voice call handling in LTE networks worldwide today and used on almost every FDD LTE network.

Enterprise/In-building demand grows

Although outdoor 4G coverage is generally good, there remains poor in-building service. The high frequency means that in-building penetration is less useful than at the lower frequencies adopted in other countries (e.g. 800 MHz in the US and Europe). Users have to move to the windows to get a better signal if they want to stick with 4G.

To address that, China Mobile is actively considering deploying large numbers of Enterprise small cells. Various trials are in progress, and one province has issued an RFP for commercial deployment of (initially) 1000 units. Whether they will succeed depends on convincing the operator that these products are mature enough and reliable enough for commercial service.

Larger buildings, such as airports and shopping malls, can justify the higher cost of a DAS (Distributed Antenna System) or DRS (Distributed Radio System). Huawei offers their "Lampsite" indoor DRS solution, which has been deployed in Beijing Airport (with 2200 radio heads). This is a distributed radio system, where the baseband processing is handled centrally in a co-located basestation rather that at the radio head. This is typically more expensive than using small cells, especially for small to medium sized buildings.

Dual Mode Products

Since 4G isn't used for voice, any small cells deployed where there is no good indoor signal would also need a 2G or 3G capability. This has led to operator requests from some provinces that Enterprise small cells MUST be dual mode 3G/4G, i.e. TD-SCDMA and TD-LTE. This isn't nationwide, and each local province may have different views.

For 3G, the femtocells did not become very mature because they weren't deployed in large volumes and because there are not many femtocell vendors with deep telecom knowledge background - the whole ecosystem is relatively weak. The situation is much better for 4G, which is a more common standard.

There are about ten local Chinese companies offering their own TD-LTE small cells today, of which about half have a roadmap towards dual mode.

The strong timing requirements for TD-LTE

TD-LTE requires any cells sharing the same frequency to be tightly phase aligned within 1.5 microseconds, placing strong technical demands on the product design. Small cells use a variety of methods to synchronise including GPS, IEEE 1588 and "sniffing". It appears that China Mobile prefer the use of RF sniffing (sensing and detecting signals from neighbouring macrocells) because that provides the most accurate timing and the least interference. When not available, especially indoors, then other methods are used instead.

Our thanks to Calvin Wang, Product Director for Small Cells at Quanta Computer Inc. for sharing his insights into the Chinese marketplace during the preparation of this article. For Chinese readers, you can find our more about the Chinese small cell market at his specialist website femtochina.com.com

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Comments   

#1 anthony mccray said: 
Very good insight
0 Quote 2014-08-05 17:06
 
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