When Technology and Policy Collide: A Case Study of LTE License in China

Abstract

China does not auction radio spectrum for wireless service but uses operations license granted by the government. The paper takes on LTE license to show how a flawed policy impairs adoption of LTE technology in China and how excessive interference hurts telecom operators.
LTE has two flavors: TDD and FDD. The Chinese government favors TD-LTE, a “minority” technology, to rescue struggling China Mobile from its failing 3G service, and to make China a leader in LTE. China does this by suppressing LTE FDD and China Mobile’s rivals China Unicom and China Telecom that prefer LTE FDD. As the paper argues, the bad policy has turned a business decision to a politically charged issue that brings harm to LTE development. The high price China has to pay: delayed LTE deployment, eliminated competition, discontent public and a laggard behind many countries in a tight race.
The paper then traces the root of the bad policy, what can happen when technology is viewed with political bias, how extraneous factors influence directions of technology without challenge, and what China can learn from the mistake and prevent it from impairing a promising technology.
Key words: LTE; TD-LTE; LTE FDD; business decision; 3G; competition; technology adoption; government interference