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June 14, 2019

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Faster, smarter: 5G takes us into the future

The issuance of long-awaited 5G licenses in China last week was the starting gun of the next-generation of mobile communications in the world’s biggest mobile market.

It’s a very big deal indeed. 5G, or fifth-generation technology, is expected to generate 10.6 trillion yuan (US$1.47 trillion) of economic output and create over 3 million jobs between 2020 and 2025.

“The technology is expected to bring new opportunities and buoy the growth of China’s digital economy,” said Miao Wei, who heads the Ministry of Industry and Information Technology, the country’s top industry regulator. “It will accelerate the digital transformation of many industries and will be more intensively used in sectors such as smart driving.”

On June 6, the ministry granted 5G licenses to China Mobile, China Telecom, China Unicom and the China Broadcasting Network — the nation’s top three telecommunications carriers and its national broadcaster.

Compared with previous 4G services, 5G offers speeds 20 to 50 times faster.

Though China is not the first country to release 5G, its massive base of mobile phone users does catapult it into world leadership. In addition to creating jobs and business opportunities, it will mean faster Internet access for consumers, industry association GSMA said.

“The debut here can’t really be compared with development in other countries,” said Joe Guan, GSMA China’s head of policy.

5G services have already begun to be rolled out in countries like South Korea and Britain, but those services are limited in scale and user base. For example, 5G networks cover only 450,000 people in 10 UK cities.

By comparison, China Mobile alone is expected to begin 5G services in 40 cities by September. The rollout includes Shanghai, a metropolis of more than 24 million people.

Another key feature of 5G is low latency. That refers to a computer network optimized to process a very high volume of data with minimal delays. Such networks are designed to support operations that require near real-time access to rapidly changing data, and will create applications beyond traditional telecommunications, such as autonomous driving and industrial robot control.

“It brings not only benefits for consumers, but also for enterprises and the whole economy,” GSMA’s Guan added.

It’s obvious why telecom carriers, equipment vendors, smartphone brands and content and service providers are all focused on 5G. It’s viewed as the catalyst of the economy in the next decade.

Consumers anxious to connect to the new technology will need to be patient.

“I am interested in using 5G,” said Li Jun, a Shanghai-based designer, “but it will take time until meaningful applications are ready.”

Li also said he is interested in how 5G will be applied to smart driving and in the connection of home appliances.

Carriers and wireless equipment makers

Mobile carriers need time to build more 5G base stations and draft related price packages. The good news is that users’ SIM cards and numbers can be retained in the shift from 4G to 5G. However, users will have to purchase 5G-enabled smartphones to enjoy the services.

Chinese mobile carriers are expected to invest 1.2 trillion yuan in 5G by 2025, 50 percent more than their combined investment in 4G, according to Nomura.

Shanghai has about 2,000 5G base stations now, including 5G coverage in railway stations and sports stadiums, said Shanghai Vice Mayor Wu Qing.

By the end of this year, China Telecom plans to build 3,000 base stations, and the carrier has also announced it will invest 18 billion yuan in the next three years in Shanghai, mainly on 5G. China Telecom is a relatively smaller carrier compared with China Mobile, which is expected to build even more 5G stations in Shanghai.

Different from past telecommunications innovations, China holds about 30 percent of 5G technology patents. The debut of 5G brings huge opportunities for firms like Huawei and ZTE.

Overseas firms like Nokia, Ericsson, Qualcomm and Intel, which have carried out research and tests in China, can also share in China’s development, according to the ministry.

5G phones

Samsung, Huawei, Oppo, Vivo, Xiaomi, Lenovo and OnePlus have already launched 5G phone models, many of them targeting overseas markets. Apple hasn’t launched 5G iPhone models yet.

China Mobile has purchased about 10,000 5G phones for its first group of users. They were bought from firms like Huawei, ZTE, Oppo, Vivo and Xiaomi, Chinese media reported recently.

All smartphone brands want to be closely linked with carriers.

“Every player wants to catch up game-changing opportunities, especially in a tough market environment,” Jia Mo, an analyst at Canalys, told Shanghai Daily. “It will make competition in 5G models very heated.”

In 2019, global smartphone sales are forecast to decline 3.1 percent to 1.35 billion units because of sluggish consumer demand and the uncertain business environment, Canalys said in a report in May.

The structure of China’s smartphone market changed dramatically during the transition from 3G to 4G, with some brands losing market share because they weren’t sufficiently prepared.

Vivo, the No. 3 player of the domestic market, said it has sent its 5G model to the ministry for a sales license. We are “fully prepared for 5G,” Vivo said.

Most Android 5G models cost more than 5,000 yuan, double or triple the price of 4G flagship models. The price will become more affordable as volumes increase, analysts said.

The cost of 5G chips is a key factor. Currently, Qualcomm and Huawei have high-end 5G smartphone chips.

Benefits from 5G

The video production and distribution industry is expected to be a key beneficiary of the 5G rollout, along with the gaming industry, officials said.

IQiyi, one of the country’s top online video firms, is working with China Unicom to test the latest 8K resolution of super high-definition and virtual reality content, which is being offered to residents in the Huilongguan region of Beijing.

Compared with 4G, high-quality and super high-definition are transmitted through the improved bandwidth and speed of 5G. Virtual reality services become more interactive and immersive.

“5G is one of most exciting technologies for the film and video industries, turning lab technology into reality,” said Gong Yu, iQiyi’s chief executive.

5G-based video transmission can also be used in smart transportation, remote medical services, online education and technology exhibitions.

Cloud games, which don’t require players to download applications on smartphones, will become more popular in the 5G era. The playing experience will be improved and more games with lower threshold will be available, industry officials said.

5G offers real-time, high-precision location, which will fuel the development of autonomous driving, said China Mobile. The carrier is working with automotive giant SAIC to test self-driving cars in Shanghai.

China Mobile has established a fund of 30 billion yuan to boost 5G applications. It has said it plans to test new 5G services, like mobile health care, robotics, smart manufacturing and high-definition video streaming.


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