In a major development that marks a milestone in Beijing’s ambition to become a technological superpower, Chinese operators have now officially launched 5G services in the country, although they were originally expected to launch in 2020.
The three largest Chinese state-owned operators – China Telecom (HKG: 0728), China Unicom (HKG: 0762) and China Mobile (HKG: 0941) – have now launched comparable 5G packages from 128 yuan ($ 18) onwards Month for 30 GB of data and 500 minutes of calls. China Mobile subscribers can use 300 GB of data at a download speed of up to 1 Gbit / s for 599 yuan ($ 85), while entry-level models only offer download speeds of up to 300 Mbit / s.
China is ready to conquer the largest 5G market in the world. According to the government-sponsored Xinhua release, 5G commercial services are now available in 50 Chinese cities, including Beijing, Shanghai, Guangzhou and Shenzhen. In addition, the authorities plan to install more than 50,000 5G base stations in major Chinese cities by the end of the year.
This makes China the second country in the world to introduce 5G at the national level, with South Korea the first country to win. According to the GSMA, the mobile industry, the Asian giant will be the largest number of 5G connections by 2025, well ahead of North America and Europe.
Jefferies Group (NYSE: JEF 19.14 – 0.24%), a US-based multinational investment bank and financial services company, said in a statement this week that China’s 5G penetration is projected to exceed 7%. or 110 million users in 2020. As a reference of the South The current penetration of Korea is 3%.
China is expected to spend between $ 130 and $ 217 billion on 5G-related infrastructure between 2020 and 2025, according to a study by China’s Information and Communications Technologies Academy.
Despite the euphoria associated with this event, China still faces some obstacles in the 5G area. Although 5G services in China cost less than 4G per gigabyte, some analysts fear that this service is too expensive.
Edison Lee, an analyst at Jefferies, expressed his concerns as follows: “We are surprised that China’s price plans for the 5G give an average price per GB ($ 0.39) that is almost identical to that of Korea (0, $ 38). China’s per capita income is 69% lower than that of Korea, so similar prices probably mean Korea’s penetration rate will be lower than Korea’s. ”
The current trade war between the United States and China is another obstacle. The dispute has become a quest for technological superiority and superiority, and the 5G sphere is increasingly becoming a major battlefield and a politically charged topic.
President Donald Trump said earlier this year that “the 5G race is due and the US must win”. In early June, the US Department of Commerce included Chinese technology giant Huawei on the list of companies for reasons of national security and violation of US sanctions against Iran. (Read our corresponding report here).
This move prevents Huawei from retrieving sensitive components from US companies without prior Trump administration approval. As a result, in August, the Trump administration banned the use of federal subsidies for the purchase of telecommunications equipment from five Chinese companies, including Huawei.
These restrictions have now cast doubt on Huawei’s ability to maintain the current pace of 5G Base Station production, which could slow down China’s plans for a 5G revolution.
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