Competition in China's fourth-generation telecommunications market is set to heat up after the regulator awarded LTE-FDD (long-term evolution frequency-division duplexing) trial permits to local carriers on Friday, industry sources said.

The long-awaited permits will help the nation's two smaller carriers to challenge China Mobile Corp, the world's biggest telecom operator by subscriber numbers.

The Ministry of Industry and Information Technology said it will allow China Telecom Corp Ltd and China United Network Communications Group Co Ltd, also known as China Unicom, to test a joint 4G network using LTE-FDD and TD-LTE technologies in 16 cities. Those cities weren't identified.