Chinese firms eye 5G bonanza
Massive funds pouring into researching new Internet technology
Take a look at the coverage map in China and you will see many more areas covered by 3G than 4G. But the industry is already reaching out for the next big thing – 5G, which is expected to bring more than just extremely fast Internet speed.
The fifth generation of wireless network, known as 5G, is a technology that will deliver data at higher speeds than its predecessor 4G.
Lab tests by Chinese telecom carriers suggest that 5G speeds can reach more than 10 Gbps, about 100 times faster than in the era of 4G. But it is unclear whether this will hold up in the real world.
In addition to bringing faster Internet connection, 5G is expected to aim for a higher capacity than the current 4G, enabling consumption of unlimited data quantities in terms of gigabyte per user and per month as well as allowing higher numbers of mobile broadband users.
This capability will make applications more diversified, and analysts say that 5G will provide more functionality than users typically get nowadays with 4G.
While some customers will have used remote controls for their Wi-Fi-enabled TVs, air conditioners and lamps via smartphone with 4G, a 5G connection will spread to the urban infrastructure at large.
In the world of 5G, driverless cars will be able to communicate with each other, cities will be properly connected and people will be able to look forward to an Internet of Things scenario.
The International Telecommunication Union (ITU) has set the timetable for the development of 5G and pledged to mainly focus on working out a uni- fied network standard and frequencies for the new generation of mobile technology in the following four years.
This means that 5G will be ready for its worldwide rollout in 2020. Now it’s up to telecom carriers and tech firms to determine when consumers can enjoy the future of mobile.
China’s race to 5G
China Mobile, the country’s largest wireless carrier by subscribers, is seeking to provide 5G networking services to consumers in 2020.
According to a Weibo post on November 2, the company has set up a 5G innovation center in Qingdao, East China’s Shandong Province. The center attracted 42 partners from related industries such as the Internet of Things, driverless cars and virtual reality.
The smaller China Unicom has also showed its determination to develop 5G. During its partner conference held in Qingdao earlier this month, the company showcased its capabilities in driverless cars and smart logistics with 5G. It has built an R&D center for the technology, making it well prepared for the possible application of 5G in 2020, according to information the company sent to the Global Times on Tuesday.
5G technology is expected to be crucial to China Unicom in a bid to surpass China Mobile.
In the current 4G battleground, China Mobile continues to dominate with its 481 million users during the first three quarters of 2016, followed by China Telecom which has 107 million users, while China Unicom lags far behind with 88.9 million, according to their financial reports.
Apart from telecom carriers, domestic hardware manufacturers like Huawei Technologies and ZTE have also weighed in under the encouragement of telecom authorities.
Huawei, one of the world’s largest telecommunications equipment makers, appears to be one of the most aggressive and high-profile participants.
Almost half of the company’s employees will participate in research and development of 5G, and the company will invest $600 million in the sector before the year 2018, Huawei rotating CEO Hu Houkun, was quoted by CNBC as saying in late October.
The company predicted in a research note that by 2025 there will be 100 billion connections globally, 55 percent of which are from smart cities and smart industries.
Most of these connections will occur between people and things or between things and things.
Fight for the future
While Chinese firms are working hard to bring 5G to consumers by 2020, Swedish wireless network supplier Ericsson AB said they would start to deliver 5G mobile phone network components in 2017.
Ericsson is leading the EU 5G standardization projects.
As for the US side, its homegrown Qualcomm, the world’s major provider of mobile chips, in mid-October announced its plans to deliver the first chip for 5G networks by 2018.
Still, faster entry does not automatically translate into global application, which can only happen when a unified standard is issued by ITU.
“Foreign firms all want to get an early start, because they aim to continue maintaining their stronghold in the next generation of cellular networks,” Xiang Ligang, chief executive of telecom industry portal cctime.com, told the Global Times Wednesday.
He noted that China has long been the follower of the US and EU in the development of 2G and 3G, which made it impossible for Chinese firms to get a big slice of the mobile Internet bonanza in the previous generations.
Using smartphone firms as an example, most of the brands in China, except Huawei, are not capable of developing their own mobile chips and usually have to pay lots of money to buy Qualcomm chips, which Xiang said greatly squeezed their profit margins.
Things are expected to change in the future.
“China now has the ability to play a leading role in developing new standards for the next generation of mobile networks, as we have achieved many technological breakthroughs for 5G. Meanwhile, the large population of Web users in China and their strong needs for connecting things around them will facilitate the application of 5G there,” Xiang opined.
Zhongxing Telecommunication Equipment Corp showcased its 5G smartphone at the Mobile World Congress in February. The phone can deliver data at a speed of more than 10 Gbps.
Market research provider reportsnreports.com in March estimated that 5G networks would generate $250 billion in annual service revenue by 2025.