Technology wars waged in the name of national pride are an unwelcome distraction from the real socio-economic potential of 5G, and pressurize operators to make ill-conceived roll-out decisions to please their governments. But they are a fact of the 5G landscape, and though the USA may have been the first major economy to boast commercial 5G networks, in most other respects China is way ahead – in the scale and pace of its planned deployments; in the breadth of use cases it is bringing to market; in its vendors’ share of the patents base and the early contracts.
Even Qualcomm – with Cisco and Intel the USA’s biggest claim to be a 5G technology powerhouse – acknowledged China’s pre-eminence during a keynote address at the MWC Shanghai conference last week. Frank Meng, chairman of Qualcomm China, said 5G has enable China to be on the front line of mobile technology development and deployment for the first time, after being a follower in 3G and 4G.
There are many contrasts from those days, including a more developed equipment and device ecosystem in China than a decade ago; massive data usage levels and a growing level of affluence and consumerism; and hefty doses of government support. In 3G, China moved late partly because it was clinging to the idea of driving its own platforms, namely its own 3G standard, TD-SCDMA, whose inadequacies drove China Mobile to accelerate its 4G efforts in order to escape from its technology prison.
That determination by the world’s largest operator not only brought 4G to market far more rapidly than 3G, but had another effect – China Mobile only had unpaired TDD spectrum, at the time, for LTE, so it used its full weight to drive an ecosystem behind the junior branch of the 4G standards, TD-LTE. Rather than retreating to a tech island, it pushed its network as a global standard, greatly increasing its influence on the international standards and patents base, particularly during the move towards 5G, which will far more reliant than previous generations on unpaired spectrum (including the 3.5 GHz band at the heart of most early 5G roll-outs).
Meng pointed to the international ripple effect that the Chinese operators’ actions have, because of the size of their home market. Their extensive trials, ahead of large-scale commercial launches in early 2020, have spurred a broad Chinese ecosystem of handset and equipment providers which will generate “very solid growth” for 5G at home and broad, he said.
Meng was, of course, keen to demonstrate the role Qualcomm has played in propelling China to the first rank of 5G players. The company has invested heavily in Chinese partnerships, start-ups and foundries in order to gain a key role in the country’s efforts to be self-sufficient in chips. But as he was giving his address before the USA and China agreed their truce on Huawei buying US components, he must still have been fearing the worst in terms of lost sales to Chinese companies and possible retaliation by Chinese authorities.
He pointed out that Qualcomm supplies many Chinese handset makers, including Lenovo, OnePlus, Vivo, Xiaomi and ZTE, and this is helping to accelerate 5G roll-out and uptake round the world. When 4G was first deployed, there were “only four global carriers and three terminal makers”, he noted. “This year, at the beginning of 5G in the world, more than 20 different operators have launched globally and more than 20 mobile device makers” have launched products, or plan to do so later this year.
“As long as local regions have plans for 5G, you can find a Chinese presence,” he said.
Also at MWC, an executive from banking giant JPMorgan Chase was explaining why China is experiencing such a strong hi-tech boom, including 5G leadership. Jing Ulrich, vice chairman of global banking and Asia-Pacific, said the combination of strong government support and ready capital has transformed China’s position.
“The Chinese leader long ago realised technology would be the future driver of economic growth, so in terms of financial support and legal support, we have a lot from the government. We also have various policies for AI, for Made in China 2025 and the biotech industry,” she said.
The government regards 5G as an enabler of transformation in several industries which are important to plans for Chinese economic growth and social change, including automotive, manufacturing and entertainment.
Ulrich said China can mobilize capital quickly as it has a high savings rate and buoyant venture capital and private equity industries, plus barriers to inward investment by global companies have been lowered over the years.
And the huge population provides a strong base for testing new services and achieving a good revenue base quickly from new launches, as demonstrated in the way China has leapfrogged most other countries in the use of mobile payments.