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China’s telecoms carriers push to complete ‘political task’ of 5G-network rollout amid coronavirus crisis

A woman using her smartphone walks past a vehicle covered with a China Unicom 5G advertisement in Beijing – Photo: Reuters

 

A Special Report from the South China Morning Post

China is pushing ahead with the nationwide roll-out of 5G mobile services amid the coronavirus crisis, as the country’s three telecommunications carriers vow to complete their infrastructure deployments without delay.

While that commitment may have fallen short of the “accelerated 5G implementation” the central government wanted from China Mobile, China Unicom and China Telecom, analysts indicated that it signaled the industry’s confidence about the virus outbreak being contained in the near term.

“The epidemic is expected to be under control by the end of April, so the carriers will have enough time to reach their goals,” said Cui Kai, a senior research manager at IDC China. The optimism expressed by the three telecoms carriers reinforces China’s efforts to promote consumption and investment, as the country deals with an economic slowdown aggravated by the novel coronavirus outbreak and the protracted trade war with the US. China treats 5G service expansion as a national strategic priority.

 

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China Telecom technicians set up a 5G base station. Estimates indicate the deployment of between 700,000 to 800,000 new 5G
base stations in China by the end of this year. Photo: Reuters


With peak data rates up to 100 times faster than what current 4G networks provide, 5G has been held up as “the connective tissue” for the Internet of Things, autonomous cars, smart cities and other new mobile applications, establishing the backbone for the industrial internet.

While initial commercial 5G mobile services were launched in countries like South Korea, the US, Australia and the UK, the scale of China’s market is likely to dwarf the combined size of those economies, negating any first-mover advantage.

In separate announcements last month, the Central Politburo of the Communist Party and the Ministry of Industry and Information Technology (MIIT) said the country’s 5G network development should be accelerated. China Mobile, China Unicom and China Telecom launched their initial 5G mobile service coverage in November.

At a meeting between the MIIT and the three telecoms carriers last month, all three network operators assured that there will be no delays in their 5G infrastructure programmes.

China Mobile chairman Yang Jie described the network expansion “a major political task”, which the company aims to “steadily advance”, during a visit to the company’s mobile research lab in Beijing on February 26.

China Mobile, the world’s largest wireless network operator, plans to have 300,000 5G base stations by the end of this year, according to a report by online news site C114.

A China Mobile representative said in an email that the company is not able to comment on the matter, while a China Unicom representative referred to a February 23 statement on the company’s official Weibo account. China Telecom did not immediately respond to emailed inquiries for comment.

 

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A 5G-powered camera to detect body temperature is seen at an agricultural market in Suzhou, Jiangsu province, on February
20. Initial 5G network deployments in China are helping authorities monitor the spread of the novel coronavirus. Photo: Reuters


China Unicom said on Weibo that it will complete the joint installation of 250,000 new 5G base stations with China Telecom by the third quarter of this year, three months ahead of the original schedule.

“The three carriers would be able to finish 550,000 base stations this year,” IDC’s Cui said. “That is in line with our 600,000 estimate last year.”

The number of new 5G base stations installed this year could be higher, according to other projections.

“Current market expectation is likely around 700,000 to 800,000 5G macro base stations,” said Jefferies equity analyst Edison Lee in a report last month. “Market excitement about this theme [of an accelerated 5G network roll-out] is likely to continue.”

The MIIT has reported that there were 130,000 new 5G base stations installed by the country’s three telecoms carriers last year.

China says it built 130,000 5G base stations as of the end of 2019

The steady annual deployment of new 5G base stations is critical to meet future demand in the world’s second largest economy and biggest smartphone market. China is expected to have 600 million 5G mobile users by 2025, which would make up 40 per cent of the total global 5G subscribers, according to forecast by the GSM Association, the London-based trade group that represents the interests of mobile network operators worldwide.

Capital spending on 5G was previously estimated at between 900 billion and 1.5 trillion yuan (US$129 billion to US$215 billion) between 2020 and 2025, according to a 2018 study published by the China Academy of Information and Communications Technology. Sales of 5G smartphones in China are expected to reach 170 million this year, according to a report by state-owned Xinhua News.

While 5G infrastructure is expected to help the development of smart city projects, the coronavirus outbreak has seen 5G support various health care and temperature monitoring applications.

“I think the real pain point for China’s 5G development is application, not the epidemic,” IDC’s Cui said. “If we don’t have any killer application, the large-scale deployment [of 5G base stations] will be pointless.”

 

 

Editors Note:
This is an original article published by the South China Morning Post (SCMP) and we republish it here by kind permission of the SCMP. To see more great business articles from the SCMP, visit them on the web at: https://www.scmp.com

 

 

 

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