China 5G Network Will Eclipse America's Buildout, Get $218 Billion Investment

Despite the globally highlighted U.S curbs on China’s Huawei in 5G, reports say that China is making huge investments in the 5G network and may eclipse the United States’ investments in the segment.

According to a study, China’s 5G investments in the period between 2019 and 2023 will be massive as it shifts from 4G to the next-generation mobile technology (5G). It says China’s total spending on 5G will be double that of U.S investments during the same period.

China’s total 5G capital expenditure between 2020 and 2025, will be around $130.8 billion to 218 billion, according to the China Academy of Information and Communications Technology.

The report by the US-based Dell’ Oro noted that China’s higher 5G investments also reflects its ambition to be ahead in the global race to roll out ultra-fast, 5G telecoms networks that power industrial internet, smart cities and autonomous driving.

“With global data traffic projected to grow 3 to 4 times over the forecast period, no one is asking anymore whether there is a business case for using more spectrum and utilizing it more efficiently,” noted Stefan Pongratz, senior director at Dell’Oro, in the report.

The outlook on global spending for 5G mobile networks is US$1.3 trillion for the period between 2019 and 2025, according to GSMA Intelligence.

A Dell’ Oro spokeswoman roughly put China’s combined 4G and 5G spending in the vicinity of $40 billion between 2019 and 2023.

The 5G infrastructure in China will be manned by domestic network operators such as China Mobile, China Unicom, and China Telecom.

By 2025, China’s 5G connections will be around 500 million. That will constitute 28 percent of total mobile connections in the country, said the China Internet Report.

However, hiccups are also visible on China’s efforts to augment 5G infrastructure deployment. The ongoing trade war with the U.S is a big hurdle.

Challenges to China’s 5G spread

Washington’s blacklisting of Huawei Technologies which also makes HuaweiP20 smartphones, citing security concerns has been a blow.

The U.S ban of Huawei involves an embargo on the sale of American technologies to the company.

“Huawei may have limited inventories that allow it to deliver more 5G equipment if the US export ban continues,” noted Edison Lee, an equity analyst at Jefferies.

A recent report also pointed to China’s crunch of affordable 5G smartphones until the fourth quarter of 2020. Lee said the handsets to test trial 5G networks in China will stay in short supply.

China’s demand for 5G smartphones will zoom to more than 1 billion by 2024, according to CCID Consulting.

US lawmakers seek bigger investments in 5G

Meanwhile, a bipartisan bill in the U.S has urged higher American investment in 5G technology to thwart China’s dominance in the technology.

The lawmakers also want U.S. companies to have a greater say in setting standards for the 5G network.

The bill by U.S. Representative Michael McCaul of Texas, called up the secretary of state to boost the “representation and leadership” of the United States at international telecommunication organizations framing 5G cellular network standards.

“China’s majority control of the world’s 5G networks, interconnected devices, and cloud storage is a risk we cannot accept,” McCaul told Reuters.