Tough decisions

The network upgrades in the world's biggest mobile phone market are a boon for equipment vendors like Shenzhen-based Huawei Technologies Co Ltd and ZTE Corp , which already each won over 25 percent of China Mobile's $3.2 billion 4G tender.

Huawei expects revenues of $2 billion from 4G investments in 2013, and a 10 percent year-on-year increase in its 4G revenue over the next two years. ZTE also sees growing income as carriers continue to invest in 4G at least until 2015.

"A nationwide 4G network is a huge undertaking - the cost of building system equipment alone is conservatively estimated at more than 100 billion yuan ($16.4 billion)," said Gu Xiang, ZTE's deputy general manager for wireless products.

Faster mobile Internet allows subscribers to use apps like the hugely popular WeChat from Tencent Holdings Ltd for messaging as well as voice and video calls. China Mobile has blamed such apps for diminishing revenues, leading to a lower-than-expected third-quarter net profit.

While all three networks must make substantial investments, the road to 4G is likely to be easiest, and cheapest, for China Unicom which only needs a simple update to its current 3G network to achieve the globally popular FDD-LTE standard.

China Telecom is the worst off.

The smallest of China's carriers has the most 3G subscribers, and its third quarter net profits are up 20 percent on the same period last year in what is its third straight quarter of double-digit growth.

It neither has the cash of China Mobile, nor the easily upgradable network of China Unicom, and now faces the choice of sticking with 3G and hoping it will keep its subscribers, or shelling out for the more expensive jump to 4G.

"There is always an inherent conflict between spending more or optimising the assets you have already used on the ground," said Delta Partner's Rio.

"They could still utilize their network for five years without having to introduce any new technology, however this new technology is available and there is pressure from the market and consumers for them to invest in this technology."

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