China’s investment in 5G technology is expected to exceed one trillion yuan (US$145 billion) in the next five years, driving the total economic output to more than 10 trillion yuan, People’s Daily reported this week.
China is projected to invest US$184 billion on 5G by 2025, accounting for 49.73% of Asian mobile operators’ US$370 billion investment in 5G networks building between 2018 and 2025, according to a report The Mobile Economy Asia Pacific 2019 by Global System for Mobile Communications Alliance (GSMA).
China is currently testing 5G across all major cities and provinces ahead of commercial launches next year and it is forecast that 28% of the country’s mobile connections will be running on 5G networks by 2025, accounting for about a third of all 5G connections globally by this point, the report said.
China’s telecom operators are projected to invest more than 220 billion yuan on 5G equipment and the expenditure on 5G equipment by all industries is expected to surpass 54 billion yuan in 2020, according to a white paper on 5G’s economic and social impact by the China Academy of Information and Communications Technology (CAICT).
The information consumption driven by 5G commercialization in the country will exceed 8 trillion yuan from 2020 to 2025, directly driving the total economic output to 10.6 trillion yuan, said Liu Duo, president of the China Academy of Information and Communications Technology.
5G technology features high bandwidth, low delay and wide connection characteristics, which make it a key infrastructure for the digital transformation of economy and society, said Yang Jie, chairman of China Mobile.
The deep integration of 5G technology with other technologies including cloud computing, big data, artificial intelligence will truly realize the interconnection of everything, Yang added.
China Mobile will build 50,000 5G base stations nationwide in 2019, providing commercialized 5G services in over 50 cities and the services will be provided in all cities at and above the prefectural level by 2020 , according to Yang.
China Telecom also announced the completion of commercial deployment of 5G in more than 40 cities by the end of this year.
According to a 2018 Deloitte study referred to by CNBC, China has outspent the US by $24 billion in 5G infrastructure.
China has built 350,000 new cell sites, while the US has built fewer than 30,000 in the same time-frame.
Deloitte also estimated that the equipment necessary to add a carrier in China cost about 35% less than the US, suggesting that Washington would need to spend 2.67 times the amount that China does to generate an equivalent amount of wireless network capacity.
“China and other countries may be creating a 5G tsunami, making it near impossible to catch up,” Deloitte said in its report.
“Unless tangible steps are taken to help rebalance the private investment case for the upgrade with the demonstrated external benefits to other industries and the public good, the United States may risk losing the leadership it gained in the previous era. The negative consequences could take decades to overcome, and other countries are already making their moves.”