China issues 5G operating licences faster than expected

Full deployment of 5G networks in China, which has almost 1.6 billion wireless phone subscriptions, is likely to boost local firms making gear for applications in robotics, remote surveillance and virtual reality.
Full deployment of 5G networks in China, which has almost 1.6 billion wireless phone subscriptions, is likely to boost local firms making gear for applications in robotics, remote surveillance and virtual reality.PHOTO: REUTERS

BEIJING • China approved four operating licences for 5G networks, setting the stage for the super-fast telecommunications system amid simmering tensions with the United States over technology and trade.

The country's three state-owned wireless carriers and China Broadcasting Network were granted licences for full commercial deployment, the Ministry of Industry and Information Technology said yesterday. The three operators, China Mobile, China Telecom and China Unicom Hong Kong, have been testing the technology in several cities, including Beijing and Shenzhen.

5G is the next-generation mobile network that offers faster data transfer speed and could enhance technologies such as autonomous driving, remote medical diagnosis and mobile payments.

Full deployment of 5G networks in a country with almost 1.6 billion wireless phone subscriptions is expected to boost local firms making gear for applications in robotics, remote surveillance and virtual reality. The faster-than-expected approvals also come as Shenzhen-based Huawei Technologies, the world's largest manufacturer of networking equipment, has vowed to maintain its lead in the face of a US campaign pressuring allies not to use the company's products.

The battle over 5G network suppliers is part of what China sees as a broader push by the US administration to check China's rise as a technology powerhouse.

The administration of US President Donald Trump last month banned American companies from selling high-tech components to Huawei on national security grounds, though a 90-day reprieve was issued. The move has led to an escalation in the US-China trade war, with Beijing preparing its own blacklist of "unreliable" foreign companies.

Several firms have already distanced themselves from Huawei, including Google, whose Android operating system runs the vast majority of smartphones in the world.

 
 

The Chinese government's acceleration of 5G licensing is probably aimed at ensuring carriers do not weaken plans to build as many as 110,000 5G base stations, assuming Huawei can deliver the necessary equipment using component inventories, Mr Edison Lee and Mr Timothy Chau, analysts at Jefferies, wrote in a note on Wednesday to clients.

"Huawei will fully support Chinese carriers' 5G products in China," the firm said following the licence announcement yesterday.

Industry and Information Technology Minister Miao Wei said: "After the issuance of 5G licences, we will continue to welcome foreign companies to actively participate in China's 5G market, seek common development of China's 5G and share the achievements of China's 5G development."

Foreign Ministry spokesman Geng Shuang said the approval of the licences was Beijing's way of showing the world that "China will continue to expand its openness and sustain the global free trade system that is experien-cing volatility due to unilateralism and protectionism".

Introducing 5G will directly add 6.3 trillion yuan (S$1.24 trillion) to economic output and eight million jobs by 2030, the China Academy of Information and Communications Technology estimates.

BLOOMBERG, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on June 07, 2019, with the headline 'China issues 5G operating licences faster than expected'. Print Edition | Subscribe