China - the world's biggest 5G market in 2025?

5G Insights

According a study conducted by GSMA Intelligence and the China Academy of Information and Communications Technology (CAICT), China is set to become the world’s largest 5G mobile market in 2025.

The China 5G study predicts that 5G connections in China are expected to reach 428 million by 2025, accounting for 39% of the 1.1 billion global 5G connections expected by that point.  

The country’s three major mobile operators - China Mobile, China Unicom, and China Telecom - are stepping up their efforts towards 5G deployment, with plans to run a phased testing period for 5G networks from 2017 to 2019 before launching commercially in 2020.  

China Mobile, for example, early this year started conducting the first phase of its 5G field trials in five major cities across the country with Datang, Huawei, ZTE, Nokia and Ericsson. The first phase of the trial will focus on PoC system field trials this year and the operator will move to pre-commercial trials for interoperability tests in 20 sites or cities next year, said Wang Xiaoyun, general manager of technical department at China Mobile.

The trial is expected to expand to over 100 sites or cities in 2019, before the rollout proceeds to the commercial launch stage in 2020, Wang told reporters at Mobile World Congress Barcelona in February. China Mobile has also set up what it claims is the world’s largest 5G field trial in Huairou district in northern Beijing, he said.

Together with these partners, China Mobile has conducted trials of key technologies including massive MIMO on the 3.5GHz band, as well as carried out performance testing of mmWave spectrum on different frequency bands, such as 15GHz, 28GHz and 73GHz, said Wang.  

China Unicom and China Telecom also plans to test capacity and performance across six cities over 2017-2019 before a commercial launch in 2020.

Chinese cellcos go for “standalone” 5G deployment

 The study further points out that the three Chinese mobile carriers are expected to deploy ‘standalone’ 5G networks, which will require the construction of new base stations to site 5G equipment, backhaul links and a core network. 

That said, 5G investment in China will follow a more gradual path compared to elsewhere in Asia and over a longer timeframe than 4G, roughly seven years, from 2018 to 2025-with capex not expected to account for more than 25% of operator revenue prior to commercial launch.  

The rate of 5G network deployment and adoption in China is also expected to be slower than it was for 4G, which Chinese operators were able to deploy rapidly earlier this decade within a mature 4G ecosystem. In their early phase, 5G networks will concentrate on boosting the capacity of 4G networks to support rising cellular data traffic demands.

Though some services will require devices with new form factors, the smartphone is expected to remain the principal 5G interface at launch. Enterprise is considered to offer operators the largest incremental revenue opportunity. Key vertical markets for 5G applications include automotive and transport, logistics, energy and utilities monitoring, security, finance, healthcare, industrial and agriculture.

This article first appeared in Telecom Asia 5G Insights October 2017 Edition

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