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November 23, 2020

2020 is shaping up as the year China gained 5G dominance

By GlobalData Technology

Many operators globally have embraced 5G network deployment, with a handful of countries taking the early deployment lead. However, despite it still being early days, it is clear that China is best positioned to embrace 5G, due to massive network deployments, operator cooperation, a genuine appetite for new 5G services – and a dose of patriotism.

In retrospect, 2020 will be seen as the year in which China became the undisputed leader in adoption of 5G, at least by total subscribers. A scan of the most recent reported 5G subscriber adoption shows that Chinese mobile operators have generated the vast majority of 5G subscribers thus far.

  • China Mobile, the world’s largest mobile operator by number of subscribers with nearly 1 billion at the end of June 2020, reported 70 million 5G customers as of mid-year.
  • China Telecom, the country’s second-largest mobile operator at 343 million customers at mid-year, had 38 million customers on a 5G package.
  • China Unicom, the third-largest, had 310 million customers at mid-year but the second highest number of 5G customers, 49 million.

 

Massive 5G technology deployment has driven growth

This growth is only possible because Chinese operators have deployed 5G technology massively across their networks. Each of the three operators have around 200,000 cell sites deployed with 5G technology, including a 5G network shared by China Telecom and China Unicom to save capital.

Another reason for the enthusiastic uptake is that Chinese operators are actually providing a set of services that is driving demand for 5G. These include cloud gaming, cloud virtual reality solutions and live, immersive sporting and concert programming. Enthusiasm also extends into the enterprise segment, where all three operators are engaged in a number of commercial 5G deployments for smart city, smart factory, smart healthcare, and the like.

It’s also a good bet that some of the Chinese enthusiasm for 5G comes down to national pride  – with 5G being positioned as a sign of technological superiority in a hypercompetitive market, Chinese consumers and enterprises appear eager to adopt 5G as a show of solidarity. This initiative is also spurred on by governmental pressure for operators to deploy 5G aggressively, and for handset manufacturers to develop affordable 5G smartphones.

US take up forecast to be dwarfed by China at year end

The only three countries worth comparing are South Korea, Japan, and the US The three South Korean operators were well ahead of any other country in deploying 5G on a widescale basis in April 2019. However, in total those three operators had accumulated less than 10 million 5G subscribers as of the end of Q3 2020. Japan, another traditional technology leader, has been slow out of the gates, with massive subscriber growth not likely to take off until 2021.

Meanwhile, US operators have focused on 5G network expansions, new handsets, and speed tests but have been mum on the issue of subscriber growth. Considering that US operators tend not to provide specifics until they have something positive to report, that’s a sign that 5G uptake has been relatively slow thus far. That said, GlobalData forecasts the US will have 20 million 5G customers by the end of 2020, more than South Korea but a far cry from the 200 million+ 5G subscribers likely in China at year’s end.

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GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

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