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Is China Winning the 5G Race?

Written by Monica Savaglia
Posted August 14, 2018

Is China winning the 5G race?

This technology is fairly new, so it might be too early to say China is winning the 5G race, but the country is very focused on becoming a leader in the industry.

According to a study released by Deloitte, since 2015, China has built about 350,000 cell sites. The U.S., meanwhile, has built around 30,000.

China has been working diligently to install new wireless sites, which need to be placed on either lampposts or utility poles in densely populated areas.

China is so focused on expanding 5G throughout the country that it’s making a significant economic commitment to the technology. Its five-year economic plan, which runs through 2020, is calling for $400 billion in spending on 5G investment.

The Deloitte report said, “Consequently, China and other countries may be creating 5G networks, which will ultimately be used to power self-driving cars, virtual reality, and smart cities.”

5G networks will unlock endless possibilities from technology and enhance any smart devices we already use.

Obviously, the first country that successfully sets up 5G networks will have a massive lead over other countries working toward 5G adoption. The Deloitte report mentioned “first-adopter countries embracing 5G could sustain more than a decade of competitive advantage.” And right now, China is dominating with its installation of new wireless sites, which means it has the competitive advantage. 

Two other important factors in the 5G race are research and development and the ability for the government to quickly allocate additional radio frequencies to wireless companies. 5G needs more bandwidth, and the only way to achieve it is with these radio frequencies.

The time, money, and energy devoted to research and development in new technologies is always key when it comes to becoming a global leader in a certain industry or tech. China is devoting its time, money, and energy to 5G, and it’s already paying off.

China Mobile Hong Kong is Completing 5G Network Tests

China Mobile Hong Kong continues to work on 5G Wi-Fi. It recently announced that it is completing 5G network tests and is succeeding in connecting non-5G devices and computers to its Wi-FI hotspots.

5G-capable smartphones are still a year or more away from being fully accessible; however, devices will have the opportunity to connect using 5G Wi-Fi hotspots. China Mobile Hong Kong believes it will be ready to provide full services once rollout is complete.

The company said:

China Mobile Hong Kong has planned to build a 28GHz 5G network in selected locations by year end to conduct a field test...

The company is also working with partners to develop smart city-related applications such as smart lamp posts to be better equipped for 5G network construction and application development.

This is just one example of the dedication China and its tech companies have to 5G.

China Mobile Hong Kong continues to heavily invest in 5G research and development. It recently signed agreements with HTC to develop a solid 5G infrastructure and compatible 5G devices.

The realization that this industry is going to bring in huge profits and economic benefits is going to outweigh the current costs to deploy the technology. It's all going to be worth it in the end.

Does the U.S. Have a Chance?

Despite what is happening right now, the U.S. isn’t sitting back and watching China dominate the 5G market. The U.S. is making its own strides to become a world leader of the next-generation technology.

Last month, the U.S Federal Communications Commission (FCC) was advised by the Executive Branch to deny China Mobile entry. The Executive Branch made this decision based on “substantial and unacceptable risk to U.S. law enforcement and foreign intelligence collection.”

The CIA, FBI, and NSA told Americans in February that they shouldn’t use products from Huawei and ZTE because of the potential security risks with their devices. However, these agencies don’t have any evidence to back up these claims, but warning Americans that there might be some risk if they purchase devices by those companies could help reduce the market share of the companies, and ultimately China’s lead in the 5G race.

Additionally, the Trump administration has been contemplating creating a set of standards for a nationwide 5G mobile network to prevent China from dominating the industry. The threat is real. But it doesn’t seem like the U.S. is entirely afraid of its place in the industry.

The U.S. is gaining speed when it comes to its research for 5G. In fact, two industry giants, Intel and Qualcomm, are hard at work researching and developing 5G technologies, so the U.S. will have a chance to win the 5G race in the same way it became a leader in 4G technologies.

But as of right now, China is in the lead. A report from CTIA, a trade association for the U.S. wireless industry, said China was the country most prepared to deploy 5G networks. South Korea was second, the U.S. was third, and Japan was fourth.

It’s going to be an interesting race to 5G. I know I’m going to be paying very close attention to it!

If you want to profit no matter which nation wins the race, there's a way to do that. Click here for my colleague Jason Stutman's presentation on the companies set to dominate the 5G revolution.

Until next time,

Monica Savaglia Signature Park Avenue Digest

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.

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