China ‘firmly moving ahead’ with wide-scale 5G launch plans

China
China is rushing toward 5G. (Pixabay)

Chinese companies, including the country’s three major operators—China Mobile, China Unicom and China Telecom—are moving forward with an ambitious plan to launch wide-scale, commercial 5G services by 2020.

“We remain highly confident that China's cumulative 5G capex in the next 5-7 years will be very large, although how big it will be in 2019 is uncertain,” wrote the analysts at Wall Street research firm Jefferies in a report released to investors this week detailing the companies’ announcements on the topic during the recent Mobile World Congress trade show in Shanghai. “The Shanghai MWC last week shows that China is firmly moving ahead with its plan to commercially launch 5G in 2020.”

Importantly, Jefferies noted that China Mobile—the largest mobile operator in the world in terms of subscribers—is working to take a leadership role in the development of 5G, including by pushing 5G “stand alone” technology and creating guidelines for the construction and sale of 5G phones.

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Indeed, as the Jefferies analysts noted, China Mobile’s new “5G device guideline” calls for the procurement of 5G modems by September of this year and the delivery of 5G phones—including those with augmented and virtual reality capabilities—by April of next year.

China’s move toward 5G is being closely watched by the U.S. government, which at one point reportedly floated the idea of a federal fund to build a nationalized, nationwide 5G network. While that reported proposal hasn’t made its way to a public forum, it nonetheless underscores the interest legislators are taking in the United States’ progress toward 5G. Indeed, Sprint and T-Mobile are using the topic to urge regulators to approve their proposed merger—it will allow the combined company to launch 5G more quickly, they argue—and 5G played a central role in President Trump’s decision to block Broadcom’s hostile takeover of Qualcomm.

Industry observers generally agree that China, the United States and South Korea will take a leading role in the rollout of initial 5G networks. Already all of the major, nationwide wireless network operators in the United States have pledged to launch a handful of markets this year or early next year.

But most researchers believe China will ultimately host the world’s largest 5G market, simply due to the country’s sheer size. For example, China is expected to become the world's largest 5G market by 2025 with fully 430 million 5G connections, or one-third of the global total, according to a report by the GSMA and GTI.