YOU ARE AT:5GWhat is the outlook for 5G capex in China?

What is the outlook for 5G capex in China?

According to the GSMA, the number of 5G capex in China will support 428 million connections by 2025

Chinese telecommunications firms could invest around  $280 billion on the deployment of 5G between 2020 and 2030, according to recent Chinese press reports. An additional forecast by research firm Jefferies estimated that total capex in 5G would reach $180 billion during the 2019-2025 period.

According to a previous study by the GSMA, the number of 5G connections in China is expected to reach 428 million by 2025.  The study highlighted that Chinese mobile operators expect investments in 5G technology will follow a more gradual path and over a longer timeframe than 4G, roughly seven years, from 2018 to 2025.

“Early commercial rollouts are likely to require investment in small cells and transmission upgrades, with fiber backhaul (up to 10 Gbps) to support sub-10 ms latency. Subsequent expansion of 5G to a larger footprint in rural areas could require new site build and further incremental capex,” the GSMA said.

The industry association also said that Chinese operators are more inclined toward a standalone approach for the deployment of 5G.

Chinese mobile operators are currently paving the way in order to launch commercial 5G networks in 2020. They plan to run a phased testing period for 5G networks from until 2019 before commercial launch in 2020.

China Mobile, the world’s largest mobile telephony operator, has recently announced plans to build what it claims to be the world’s largest 5G trial network. The operator said it will start 5G trials in five Chinese cities this year. The company will conduct outdoor field tests in Hangzhou, Shanghai, Guangzhou, Suzhou and Wuhan, and aims to deploy more than 100 5G base stations in each city for the 5G tests.

The telco plans to deploy small-scale “apps demonstration” trials in a dozen other cities, including Beijing and Shenzhen. According to Liu Guangyi, CTO for terminal and wireless technology at China Mobile Research Institution, the trial networks will mostly run in the 3.5 GHz band.

Last year, the Chinese telco had announced plans to deploy more than 10,000 5G base stations by 2020. The telco also said that it expects to launch a pre-commercial 5G service in 2018.

China Unicom plans to test capacity and performance across six cities over 2017–19 before a commercial launch with 1,000 sites in 2020.

Meanwhile, China Telecom had announced plans to conduct commercial trials of 5G technology in 2019. The telco said it will carry out network field trials in six Chinese cities. In December 2017, the telco said it has deployed a new 5G base station in Lanzhou, in China’s Gansu province, expanding its pilot project for 5G networks to six cities. China Telecom had previously deployed 5G base stations in Shenzhen, Shanghai, Suzhou, Chengdu and Xiong’an new district in Baoding.

The operator also said it plans to run laboratory and networks tests until the end of 2018, before launching pre-commercialization of 5G technology in 2019. The telco aims to launch commercial 5G services in 2020.

The government of China has already kicked off the third phase of its own 5G trials. The Ministry of Industry and Information Technology said the third phase of 5G technical tests aims to get pre-commercial 5G products ready by mid-2018.

In September 2017, the second phase of tests on the 5G network’s wireless part was finished. Telecom companies have met the key performance requirements set up by the International Telecommunication Union, such as the peak rates of internet speed. Vendors including Huawei, ZTE, Ericsson and Nokia as well as local mobile operators China Mobile, China Unicom and China Telecom had participated in this phase of China’s 5G tests.

ABOUT AUTHOR

Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.

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