China closes in on 70% of world’s 5G subscribers

GUANGZHOU — China is on track to sign 70% of 5G smartphone contracts by the end of the year, putting it far ahead of the rest of the world in deploying the next-generation communications standard.

At a time when China already has over 50 million 5G handset subscribers, coverage is still spotty in the other 20-plus countries that have begun such service. Dozens of fifth-generation handsets are available on the mainland while Apple is not due to release a 5G iPhone until the fall.

“5G deployment in Europe will probably be delayed because of the coronavirus pandemic, but in China development is accelerating, we could even exceed the original plan by a bit,” Huawei’s Deputy Chairman Eric Xu told reporters at the end of March.

Because of the coronavirus, France has indefinitely postponed allotment of 5G spectrum. Spain and Austria have pushed back their own auctions as well. In the U.K., where 5G service began a year ago, 5G base stations have even been torched by people believing rumors that 5G signals carry the virus.

As China continues its steady investment in the technology, it is on the path to becoming the world’s dominant 5G power.

The U.S. launched 5G services in April last year, but the network infrastructure remains underdeveloped. South Korea, which started the same month, is further along. But the subscriber count was at only 5 million contracts as of this February, or just a tenth of China’s number.

China has surged ahead in 5G investment, potentially making it the dominant global power in the technology.

  © Reuters

Thailand rolled out commercial 5G service this March. Japan’s big three telecom providers also went live that month. But in the countries where the coronavirus continues to expand, “infrastructure development is being delayed, and the conditions that let 5G use take off are not being met,” said an industry source.

China, on the other hand, has seen a decrease in coronavirus cases despite being the place where the pandemic began, and is making a full-fledged effort to  become the birthplace of the 5G economy.

All the while, China’s three largest state-owned telecom companies plan to invest a combined 180 billion yuan ($25 billion) in 5G this year, more than four times their spending last year. Subscribers have jumped from less than 10 million at the end of 2019 to over 50 million at the end of March, according to government data.

China launched 5G last November, later than the U.S. and South Korea. Yet most Chinese cities have 5G coverage. More than 70 compatible smartphones were available domestically in March, the most anywhere in the world. That figure will rise to about 100 by the end of the year.

The country’s deliveries of 5G smartphones are north of 26 million units, suggesting that many customers have signed up for the next-generation service before having a compatible handset. Device upgrades are expected to make up the difference.

China is to account for 70% of global 5G connections this year, according to a March report by GSMA Intelligence, a British data provider. Western and other Asian markets will start catching up next year, but Chinese connections will top 800 million by 2025, with the global share approaching 50%.

Huawei and domestic peer ZTE are one of only four major companies strong in building 5G infrastructure. The other two are Europe’s Ericsson and Nokia. China will benefit if Huawei and ZTE prioritize domestic development of the 5G network. The communications standard is key for furthering self-driving technology, an arena where China is competing with the U.S.

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