Clearwire says its TD-LTE plans remain unchanged despite a major setback at key technology partner China Mobile, whose mobile broadband plans could be delayed by the Chinese government's plan to hold off on granting licenses for the service.
The two companies have been working together on devices and testing for TD-LTE, the development of which is less mature than the FDD-LTE standard used by operators like AT&T and Verizon Wireless.
China Mobile's adoption of the technology has been seen as a key way to advance the standard, as its 650 million subscribers would give TD-LTE almost instant economies of scale, which in turn would make it easier for Clearwire to secure cheaper devices and equipment for its network.
But Clearwire appeared undaunted by the recent development.
"Clearwire continues to move forward with our LTE network plans and to participate in our cooperative arrangement with China Mobile," a spokeswoman said in a statement. "LTE remains an important opportunity globally and we expect manufacturer interest in offering TDD-LTE/FDD-LTE options, like Qualcomm's Gobi Modem, to remain high."
Sprint, which plans to use Clearwire's TD-LTE network to supplement its own LTE service, said it "doesn’t anticipate any impact to Clearwire’s rollout of TD-LTE."
China Mobile said just last month it planned to begin large-scale trials of TD-LTE with the installation of 20,000 base stations in nine cities this year. In 2013, it plans to have a total of 200,000 TD-LTE base stations up and running.
But late last week reports surfaced that the Chinese government planned to delay issuing TD-LTE licenses for two to three years as it waited to build up scale for its home-grown TD-SCDMA standard, which has failed to gain widespread adoption outside China.
China Mobile could not be reached for comment.
Yankee Group Analyst Ken Rehbehn says it’s "very unfortunate news" for China Mobile, but less so for Clearwire.
"There may be a negative impact on the ecosystem because of the announcement, but it's mitigated by the fact that there are other networks moving forward with TD-LTE," he says, citing the technology's growth in markets like India, Japan and the Middle East. "The impact would be possibly a reduced variety of devices - but I don't think that's a big problem for Clearwire."
Rehbehn said he was surprised by the Chinese government's decision, as it has been a top proponent of TD-LTE in the past. China Mobile’s trials could be stalled or scaled down by the move, he says.
"TD-LTE technology came to the market largely at the behest of Chinese technology experts," he says. "This should really be the poster child technology for China. It's very surprising that the government would take steps to retard the deployment of what is largely a home grown technology."
Rehbehn is reserving his final judgment until the Chinese government makes its licensing stance official. “Until the government puts out a formal policy statement, it would be a mistake to leap to the conclusion that this is in fact what happens,” he says.