Four Chinese operators are awarded 5G licences

All the four incumbent telecom operators in China received commercial 5G licences, raising the curtain on the commercial rollout of the next generation mobile networks in the world’s biggest telecom market.

The Ministry of Industry and Information Technology, both the government policy making body and the telecom regulator in China, announced earlier this week that 5G licences would be awarded soon. It turned out the market did not need to wait for too long. On Thursday, 6 June 2019, all the four state-owned telecom operators were awarded 5G commercial licences. These include China Mobile, the world’s biggest mobile operator by subscriber numbers, China Telecom, the world’s largest integrated telecom operator by subscriber numbers, China Broadcasting Network Corporation Ltd, the state broadcaster which was awarded a basic telecom service licence in 2016, and China Unicom.

Three of them (except for Broadcasting Network) received 5G trial licences at the end of 2018. Trials by China Telecom and China Unicom were conducted on the 3.5GHz band, while China Mobile conducted its trials on the 2.6GHz and 4.9GHz bands. The consensus at that time was China would not roll out commercial 5G services until 2020 when all the major standalone (SA) mode standards are frozen. The latest move looks to be pushing the schedule forward.

Earlier this year, China Telecom announced that it had live trialled out 5G in 17 cities. China Unicom announced that it would extensively cover seven cities with 5G and cover the hotspots in 33 more cities. China Mobile also pledged to cover 40 cities with 5G. China Unicom has also certified six 5G smartphones and five industrial terminals.

The Minister for Industry and Information Technology spoke at the ceremony that China “will continue to welcome overseas enterprises to participate in the rollout of China’s 5G networks”. But the largest beneficiaries are expected to be China’s leading equipment vendors Huawei and ZTE, both of which quickly pledged their full support to the Chinese operators with their “end-to-end 5G capabilities”.

Nokia and Ericsson, both with sizeable footprints in China’s 3G and 4G networks, may carry the investors’ expectations to maximise their shares in the Chinese market, but may feel the heat of the ongoing trade war between the US and China and the exclusion of Huawei from 5G in a number of western markets. On the other hand, if the sanction is not lifted fast enough, despite the claim that it has built a stockpile of components, Huawei may soon find it difficult to supply the equipment needed by the Chinese operators.