World's largest market provides fair playing ground for foreign firms

An employee stands at an exhibition booth of PT Expo China 2019 in Beijing, showcasing the latest 5G-powered applications. Photo: Chen Qingqing/GT

China launched 5G mobile phone services on Thursday, unleashing tremendous opportunities for domestic and foreign companies. Industry representatives said the commercialization of the world's largest 5G market will drive an unprecedented acceleration of industrial growth.

About four months after the Ministry of Industry and Information Technology(MIIT), the top regulator of the telecoms sector, issued 5G licenses, the domestic industry is embracing a boom with hopes of growing into a global powerhouse in mobile telecoms.

The ultra-fast speed, low latency and capacity to handle massive amounts of data will help reshape traditional industries, leading to a highly connected society, which is in line with China's ambition to accelerate the development of the digital economy, industry representatives said at a launch event held in Beijing on Thursday.

"The country will accelerate 5G deployment, further integrating the next generation of wireless technologies with industry, and exploring application scenarios in sectors such as manufacturing, transport, energy, agriculture and so on," Chen Zhaoxiong, MIIT vice minister, told attendees at the event, which attracted nearly 400 companies from about 10 countries and regions.

The excitement was palpable as the world's largest telecoms market switched to a 5G model. Domestic and foreign companies applauded the rollout of 5G commercial services, in spite of the nation having fallen slightly behind other 5G leaders such as South Korea and the US.

Analysts drew a stark contrast between China, which is opening its lucrative domestic 5G market to foreign players, and nations like the US that have been politicizing 5G technology in the midst of the US-China trade war. The US has barred Huawei, the world's largest telecoms equipment provider, over unfounded allegations concerning security.

Industry representatives told the Global Times that China will soon sprint ahead of other rivals in the scale of 5G deployment and user number.

"With the official launch of 5G commercial service, market growth will be in full swing," Ding Yun, CEO of Huawei's carrier business group, told the Global Times on Thursday. "It's highly likely that the number of 5G users in China will reach 150 million to 200 million in 2020."

South Korea was the first country to launch 5G commercial services, but China still has the chance to catch up in terms of empowering businesses and industries with the disruptive technology, Ding noted.

Fair market

The official launch of 5G services should also boost the growth of US companies like Qualcomm and Intel, suppliers of 5G chipsets to Chinese 5G smartphone vendors OPPO, vivo and Xiaomi.

"A fully open market with ample competition is a necessity for telecom industry growth," Ding said.

Welcoming foreign rivals is in line with the Chinese government's commitment to build a shared ecosystem, he noted.

The 5G market will account for 1.1 trillion yuan ($166 billion), or 3.2 percent of China's total GDP in 2025, generating 8 million jobs and adding 2.9 trillion yuan in economic value by 2030, according to an EY report, citing data from by the China Academy of Information and Communications Technology.

The volume of China's 5G network rollout will create tremendous scale for the entire component industry. More than 1 billion potential 5G users, as well as enterprises and cities, will be connected, Neil Shah, research director of global industry consultancy Counterpoint Research, told the Global Times on Thursday.

This year will be a bit slow as the networks are not fully deployed yet, he noted. "Next year should be a breakout year for 5G as China appears on the world map alongside Korea, the US, UK and other countries in this 5G race," Shah said.

5G is on

Three carriers - China Mobile, China Telecom and China Unicom - have said they'll offer 5G services starting from Friday in the first batch of 50 cities across the country, with packages as cheap as 128 yuan per month, according to the carriers. Users won't need to change their SIM cards or phone numbers as they upgrade to 5G.

Companies like Huawei, Xiaomi and ZTE have already launched 5G phones.

Global research firm Counterpoint said in a report that 2020 will be a breakout year for 5G smartphone adoption in China, and this trend will likely rekindle smartphone demand.

Considering the market potential, US technology giant Apple is reportedly gearing up for massive shipments of 5G iPhones in 2020.

"Further growth of the 5G market needs collaboration and the world needs China in 5G," Jiang Junmu, an industry observer at Chinese telecom industry news website c114.com.cn, told the Global Times on Thursday.