For years now, it seems as though the “race to 5G” by the U.S. and China has been the subject du jour. This week, ABI Research released new forecasts showing 5G subscriptions in the Chinese market are expected to reach 739 million by 2025, which translates to nearly 40% world market share.
In terms of the annual mobile data consumption, the 5G annual data traffic in China will reach 782 Exabytes by 2025, which corelates to nearly 60% share of the world's total 5G data consumption, according to ABI.
Jiancao Hou, 5G & Mobile Network Infrastructure senior analyst at ABI, points out that unlike early adopters in places like South Korea, the U.S., Finland, Japan and other regions, the mobile network operators (MNOs) in China are owned by the government, which gives them extensive support for developing 5G networks, especially in the consumer market.
"From a spectrum perspective, the MNOs received 5G spectrum licenses for tests and trials in 2018, giving them the great opportunity to plan the best network deployment strategies and be ready for the 5G commercial launch in the following year," Hou said in a statement. "The current trade war and the ban of the Chinese domestic vendors isn't slowing down 5G deployment in China, at least over the next 2 to 3 years, given its level of 5G deployment momentum."
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China had deployed 690,000 5G base stations as of October 2020, according to ABI, and terminal connections have reached over 160 million. China’s major network operators include China Unicom and China Telecom, which are jointly deploying their standalone (SA) 5G RAN infrastructure and sharing RF resources. China Mobile is pursuing a dual-mode solution, with non-standalone (NSA) and SA, and it’s in discussions with China Broadcasting Network for a collaboration.
What about that ‘race’?
The subject of 5G in China vs. the U.S. came up during a 5GNext panel last week hosted by Chetan Sharma Consulting, with guests T-Mobile EVP of Advanced & Emerging Technologies John Saw and Intel Corporate Vice President Asha Keddy.
The consulting firm estimates the U.S. had between 30 million to 40 million 5G subscribers at the end of 2020. China had about 180 million 5G subs by the end of 2020 by Sharma’s figures; its numbers are different from China’s because a good portion of its total count is part of “5G package” customers, rather than representing 5G handsets, and Sharma doesn’t count those. Even then, China’s total 5G subscriber count is at least six times larger.
“Never underestimate China’s resolve,” Saw said, adding that it’s important to compare apples to apples. Sure, China’s 600,000+ 5G base stations represent a big number, but its population is a lot larger as well. He suggested considering the number of people served per cell site, which is roughly the same in both situations, and in that sense, they’re neck and neck.
Still, “it’s really not how fast you start, it’s how well you finish,” Saw said. The real question is who will lead in innovation, and he would bet his money on a free market economy of the U.S., where Uber and Airbnb sprang up thanks to a strong LTE network. “I like our chances. I think it’s looking good and looking better for the United States,” he said.
5G: More than one dimension
In an interview, Sharma, CEO of the consulting firm, said he sees different dimensions to the 5G race or story. “One dimension doesn’t do justice,” he told Fierce.
Based on penetration, South Korea is ahead and will stay ahead because it’s a smaller country and half of the traffic is already 5G. “From that point of view, it’s clearly way ahead,” he said.
However, if you take the point of view of number of subscribers, China wins, and nobody can catch up to that. In the case of spectrum, the U.S. has emerged the leader in making that available, although it missed a big opportunity in mid-band spectrum for 5G, which other countries seized earlier.
“I think the real test comes from what ecosystem you’re able to build” and how that prospers over a given period of time, Sharma said. That was the case with LTE, where the U.S. was the leader and that fostered the development of the aforementioned companies like Uber and Airbnb.
The real battle is in the enterprise space, and who’s going to build their factories, highways, airports and all sorts of new applications using 5G. “That’s where I think China has an early start,” in the sense that it has been experimenting and getting factories 5G-enabled earlier and faster than the U.S.
“I think the U.S. will start to catch up,” he said, noting the ecosystem that the U.S. boasts includes the likes of Apple, Amazon, Google, Microsoft, Facebook, and the ecosystem around them is vastly superior to that of China.
“From an ecosystem strength point of view, I think the U.S. has a better positioning,” globally, than Chinese companies, he said. China doesn’t have the same global reach for various reasons. “I feel the strength of the U.S. ecosystem will help it stay in the game of 5G,” and in the long run, “I think the U.S. will generate more revenue than China.”
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