China Issues 4G Licenses; Apple Inc. (AAPL) Should Benefit

China Issues 4G Licenses; Apple Inc. (AAPL) Should Benefit

China’s Ministry of Industry and Information Technology (MIIT) finally issued 4G licenses to the top three wireless carriers in the country including China Mobile Ltd. (ADR) (NYSE:CHL), China Telecom Corporation Limited (ADR) (NYSE:CHA), and China United Network Communications Ltd (SHA:600050).

China in final stages of rolling out 4G services

According to the MIIT, the issuance of the 4G TD/LTE operating licenses to the three telecommunications companies was part of the objective of China’s State Council to expand domestic demand and promote information consumption.

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A previous report from state media Xinhua indicated that the commercial 4G mobile communications services in the country will start on December 18. China Mobile Ltd. (ADR) (NYSE:CHL) is expected to roll out its 4G services on that date with its new brand He (means harmonious in Chinese language).

Many believed that Apple Inc. (NASDAQ:AAPL) will benefit from the availability of 4G services in China, Analysts in the technology industry are optimistic that the Cupertino-based iPhone and iPad maker will soon to strike a deal with China Mobile Ltd. (ADR) (NYSE:CHL), the largest smartphone carrier in China with more than 700 million users.

Apple making progress

Earlier this year, Apple Inc (NASDAQ:AAPL) received a network access license from China’s Telecom Equipment Certification Center for its devices such as the iPhone 5S and iPhone 5C to run the 4G TD/LTE services used by China Mobile on its network.

Apple Inc (NASDAQ:AAPL) has an existing partnership agreements with China Telecom Corporation Limited (ADR) (NYSE:CHA) and China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) as carrier partners for its smartphone in mainland China. It is expected to sign a deal with China Mobile Ltd. (ADR) (NYSE:CHL) in time for the launching of 4G services on December 18.

UBS analyst Steven Milunuvich upgraded his rating for the shares of Apple Inc (NASDAQ:AAPL) from Neutral to Buy and raised his price target for the stock from $540 to $650 per share. He is optimistic that the tech giant will benefit from a partnership with China Mobile.  The stock price of the company enjoyed a healthy boost when NTT DoCoMO started selling iPhones in Japan.

Milunuvich said, “The imminent support of China Mobile along with NTT DoCoMo could aid the seasonally weak summer quarters” in 2014.

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