China's Ambitious 4G Installation Plans Hold Promising Business Potential for Taiwan's Suppliers

China plans to install around 500,000 4G cell towers in its first-tier cities in one to two years, providing potential business in excess of NT$750 billion (US$25 billion) to Taiwan's manufacturers of small-cell towers, smartphones, and tablet PCs, according to senior officials of Republic of China Ministry of Economic Affairs (MOEA).

China's telecommunications authorities issued 4G licenses last year to major service providers, including China Telecom Co., Ltd., China Unicom Operations Ltd., and China Mobile Ltd. China Mobile plans to install 400,000 towers while China Unicom and China Telecom plan to install 50,000, respectively.

MOEA officials estimate that the mainland's robust 4G installation plans will offer the island's manufacturers potentially lucrative business opportunities on grounds that they are likely to strain the mainland's homegrown suppliers not to mention the mainland's intention to attract foreign manufacturers to its TD-LTE 4G camp, whose time-division technology competes against frequency-division (FD) technology accepted by most 4G powers.

MOEA officials estimate the mainland's 4G installation projects to provide more business opportunities to suppliers of small-cell towers than to suppliers of big-cell towers, as  4G systems need more towers than 3G to achieve speedier signal transmission.

Many heavyweight, small-cell tower makers in Taiwan, including GemTek Technology Co., Ltd., ZyXEL Communications Corp., SerComm Corp., and Wistron NeWeb Corp. have reportedly begun filling orders to China, with shipments to peak this year.

The officials point out that Taiwan supplies the world's best small-cell towers in terms of price-performance ratio, far outstripping South Korea. Nevertheless, the officials concede that the island's manufacturers are still unable to install towers albeit with good potential to win orders for radio frequency (RF) modules and  components.

To facilitate Taiwan's shipments of the towers to China, the ministry has designated the semi-official Industrial Technology Research Institute (ITRI) to set up a test facility for TD-LTE towers in central Taiwan. (KL)