China’s 5G network investments are predicted to surpass those in North America between 2019 and 2023, as the world’s second largest economy rapidly shifts from 4G to the next-generation mobile technology amid trade tensions with the United States. Total spending on 5G in China will be “more than twice the size” of North America’s next-generation network investments over that period, according to a report on Wednesday by Dell’Oro Group, without providing these figures. Founded in 1995, US-based Dell’Oro is a leading independent market research firm for the telecommunications industry. That pace of 5G expenditure in China marks the country’s attempt to move ahead in the global race to roll out ultra-fast, next-generation telecoms networks that will help power the industrial internet, autonomous driving and smart cities. Initial commercial 5G mobile services have already been rolled out in South Korea, the US, Australia, the UK, Switzerland and Spain. Still, the scale of China’s market is likely to dwarf the combined size of those economies, negating any first-mover advantage. Read more about the battle over 5G here A Dell’Oro spokeswoman on Thursday declined to provide specific 5G investment estimates for China, but said the country’s combined 4G and 5G spending would amount to more than US$40 billion between 2019 and 2023. Total 5G capital expenditure in China was forecast to range from 900 billion yuan to 1.5 trillion yuan (US$130.8 billion to US$218 billion) between 2020 and 2025, according to a study released in March by the China Academy of Information and Communications Technology, a research institute under the Ministry of Industry and Information Technology (MIIT). That infrastructure outlay will be led by the country’s three network operators China Mobile, China Unicom and China Telecom. Apart from those three carriers, the MIIT also granted a commercial 5G licence to the China Broadcasting Network last month. The potential of 5G has already become visible in China through a number of high-profile projects, according to the China Internet Report 2019 – published by the South China Morning Post and its sister site Abacus , in conjunction with Edith Yeung, managing partner at Proof of Capital. At Shanghai’s 2019 Auto Show in April, China Mobile promoted its support for autonomous vehicle technology using a trial 5G network. It allowed a driver at the Shanghai show to take the wheel and control a car more than 1,000 kilometres (620 miles) away in Beijing. “With [global] data traffic projected to grow 3 to 4 times over the forecast period, no one is asking any more whether there is a business case for using more spectrum and utilising it more efficiently,” said Stefan Pongratz, senior director at Dell’Oro, in the report. He described the momentum for 5G network deployment as “developing at a broader and faster pace than originally anticipated”. Global spending on 5G mobile networks is forecast to reach US$1.3 trillion between 2019 and 2025, according to data published in April by GSMA Intelligence. China is expected to have 460 million 5G connections by the end of 2025, accounting for 28 per cent of total mobile connections in the country, according to the China Internet Report . But China’s efforts to significantly accelerate its 5G’s infrastructure deployment face difficulties because of its trade war with the US. In May, Washington added telecoms equipment maker Huawei Technologies to its trade blacklist over security concerns. Top China venture capitalist sees flood of money into 5G-related areas in next 36 months That has effectively banned Huawei, China’s biggest network gear provider, from buying hardware, software and services from its American hi-tech suppliers, although the Trump administration said it would ease those restrictions and certain US companies have found a way to ship certain products again . “Huawei may have limited inventories that allow it to deliver more 5G equipment if the US export ban continues,” said Edison Lee, an equity analyst at Jefferies, in a recent report. Lee estimated there would also be a lack of affordable 5G smartphones that cost US$500 below until the fourth quarter of 2020. He said handsets to test trial 5G networks in China remained scarce in the market. More than 1 billion 5G smartphones are expected to be in use across China by 2024, according to a report by CCID Consulting last month. For the latest and most important trends in China tech, read the China Internet Report 2019
