Is 5G network slowing down in China?

April 09, 2019 //By Jean-Pierre Joosting
Is 5G network slowing down in China?
The latest 5G report form IDTechEx Research finds that there will be over 120 million 5G network subscribers in 2022 and 1.5 billion by 2029 in China, about half of the total number globally. However, the findings suggest that 5G is slowing down in China.

The three main telecom carriers in China (China Mobile, China Telecom and China Unicom) have announced their capital expenditure (capex) plan for 2019 – and 5G network capex is lower than expected. China Telecom will spend 9 billion CNY, slightly higher than China Unicom's plan of 6-8 billion. Market leader China Mobile did not disclose any number, but it is likely to be around 17 billion CNY. In total, the capax for 5G is estimated to be 34 bn CNY in China in 2019, which is much smaller than expected (50-100 bn CNY in 2019 and over 250 bn in 2020).

According to IDTechEx, one reason for the low expanse plan for 5G roll-out is the ongoing 4G network deployment. China Mobile alone has built 350K 4G station in 2018, more than double that of the plan (140K). On the other hand, the revenue from each subscriber is declining, as the Chinese government urges to reduce the price for subscribers to use the cellular network. Facing the financial pressure, Chinese operators hesitate to throw money into the high-cost 5G network roll-out without knowing if they will be able to earn money back. The CEO from Huawei, the top one telecom infrastructure supplier and number two smartphone provider in the world, has publicly expressed a similar concern on the payback from 5G network.

See also: Analysts 'see' 5G tsunami in China


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