Chinese equipment company Datang Telecom, has agreed to partner with Belgian rail infrastructure company Infrabel, in order to develop a commercial 4G network in Belgium. Datang obtained 4G spectrum and a licence in Belgium in November 2011 through BUCD BBVA but has yet to launch services. BMI does not see BUCD having a significant impact on market dynamics, given its late launch into the 4G market and superior coverage of rival operators.
The financial, technical and commercial details of the deployment will be decided by April 2015. Datang and Infrabel will launch a 4G network based on the TD-LTE standard, which Datang helped to create in collaboration with a number of other Chinese and international companies. There have been very little developments to report on since BUCD won 45MHz of spectrum in the 2.6MHz band in November 2011, paying EUR22.51mn for the licence, more than any other bidding party. While Proximus, BASE and Mobistar all launched commercial 4G services in Q413, BUCD has not even begun to deploy a network. This move to partner with Infrabel is therefore positive for Datang's spectrum investment and the market, so it can begin the process of a network rollout.
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However, BUCD will be far behind the other operators by the time it commercially launches its 4G service. Furthermore, the three existing operators acquired 800MHz spectrum during a November 2013 auction, in which BUCD did not make a bid. This is likely due to the characteristics of BUCD's planned TD-LTE network, as the standard operators more effectively at higher frequencies. Proximus, Mobistar and BASE have all launched 4G based on the FDD-LTE standard, and the addition of 800MHz spectrum will allow them to expand coverage to the population outside of the main urban areas in Belgium. Some of these regions do not have sufficient 3G coverage or quality, and the provision of 800MHz spectrum will therefore tap in to greater growth prospects with 4G services.
BMI does not see any disadvantage for Datang in deploying a TD-LTE network, as the standard has been successful around the world, with handset vendors releasing 4G devices based on the technology. However, given that BUCD is a new entrant to the Belgian market and will lag behind existing operators in terms of its 4G release date and coverage too, it seems unlikely to make an impact in BMI's forecast view.
BUCD could instead look to become a specialist 4G provider, focusing on niche markets, rather than look to directly compete with Proximus, BASE and Mobistar. One way it could achieve this is through a joint venture or acquisition of Clearwire Belgium ( b-lite), which has also begun offering limited app-based 4G services in Q413 through a TD-LTE network of its own. Clearwire's parent company is Max Helibron, which also owns VoIP supplier 3StarNet, which was said to be testing Datang Telecom's TD-LTE solutions at four sites in Belgium. A tie-up between Datang and Clearwire could therefore provide some upside potential to our 3G/4G forecasts, but until more details of a launch are known, we have left them unchanged, as we currently expect BUCD to have a limited impact on the market.