A Step Ahead – How China Is Accelerating 5G Dominance
By Erik Wernberg-Tougaard
5G is on its way. according to most experts, the technology will completely change the everyday life of both businesses and consumers. It is believed that whoever wins the global 5G race, will lead the world in the decades to come. With China´s 5G ambitions and large-scale investments in digital infrastructure, It is difficult to imagine another country than China as the winner of the global race for 5G.
In 2049, when the People’s Republic of China celebrates its 100th birthday, China wants to be a superpower in science and technology. In a complex web of policies and regulations to support this ambition, 5G plays an important role for the Chinese government. Traditionally, China’s economic stimulus packages has focused on physical infrastructure such as railways and energy pipelines, but now, China is entering a new era, one in which digital infrastructure is poised to be the driver of economic growth. With the tremendous speed at which Chinese 5G unfolds and the governmental support it receives both domestically and internationally, it seems more and more difficult to imagine a world where China will not be leading the global race for 5G.
the Chinese state drive 5g
China’s state capitalistic model is a strong driver of China’s advancement in the 5G arena. The top-down agenda has come with a series of key initiatives, that has created the basis for technological advancement and the possibility to create a complete 5G ecosystem. In the light of the corona pandemic, the Chinese government has decided to double down on the roll out of 5G, which is expected to be a key driver of increased productivity and economic growth. China is already very far in most aspects of 5G, including R&D, equipment, network, terminals, platforms, and development of applications and now seeks to further advance its position in these areas.
According to a report released Tuesday by Ericsson, the Swedish networking giant, there will be 190 million 5G subscriptions in 2020 – 90 million more than the 100 million Ericsson predicted back in November 2019. The majority of these new subscriptions are expected to come from China.
5G enables the economy on multiple levels
Unlike many Western countries, where 5G development and innovation is to a large degree driven by individual companies seeking to gain a competitive advantage over other companies, China has made large-scale, national-level plans to win the global 5G race.
This is particularly evident in the industrial policy plan ‘Made in China 2025’ and with the establishment of the IMT-2020 (5G) Promotion Group, which is an initiative to accelerate the 5G roll out, jointly founded by the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Ministry of Science and Technology.
According to a Deloitte report China outspent the United States by USD 24 billion in wireless communications infrastructure from 2015 until 2018 and built more than 350,000 new sites, while the United States built fewer than 30,000. China knows that the successful roll out of 5G is a key to unlock its potential in other technologies such as artificial intelligence (AI), robotics and Internet of Things (IoT) – in other words, the technologies of tomorrow.
more than just speed
Speed and greater network capacity are but two of the ways in which 5G will fundamentally change the digital landscape. One of the key features, is its ability to connect an unlimited number of machines to one another allowing them to communicate simultaneously. The reduced latency (that is the delay before a transfer of data begins following an instruction for its transfer) that 5G can provide, is another.
A 5G network can support a million connected devices per square kilometre. It can transmit a package of data with a delay of just 1 millisecond and it can provide peak data download speeds of up to 20 gigabits per second – more than a hundred-fold increase from what 4G can do today. The table below compares 5G’s performance to that of 4G:
Table modified based on table from EY Publication - China is poised to win the 5G race page 12
connecting products and people
The applications of 5G span a wide range of products and services as different from smart cities and autonomous driving to instant movie downloading and mobile gaming. But more importantly, 5G can support consumer and industrial applications that rely on artificial intelligence (AI), Internet of things (IoT), augmented and virtual reality (AR/VR) and many other ‘future’ technologies.
The key word here is connection. By connecting billions of devices and building new services on top of the advanced mobile infrastructure, countries with extensive 5G networks will likely experience strong economic growth. In the long-term, this will empower new technologies and make the transition to the fourth industrial revolution easier.
Photo by Andy Kelly on Unsplash
impact on business and consumers
Empowering the consumer
The roll out of 5G is a gateway to a plethora of new opportunities and possibilities for both business and consumers. On the consumer side, many things that before took hours or days to do, can now be done in minutes if not seconds. A few examples include:
Sharing, streaming and downloading of full 4K videos on smartphones will be possible to do in seconds.
Autonomous driving, which require extremely fast response rates in order to function optimally, will have a much faster basis for connecting with the surrounding infrastructure, as well as with other vehicles and pedestrians through the 5G network.
Health care will be optimized through faster and more reliable networks and can support wearable devices and online consultations, that can be undertaken using live, high-quality video streaming (read our blog on “China’s AI doctor bot” here.)
Smart pills, where an edible microchip can inform patients about what medicine to take, or when to take a pill becomes possible. The pill could be connected to the patient’s mobile that receives info on the medicines effect and dose etc.
The above are just a few of the numerous ways in which 5G improves the everyday life of the consumer. Virtual reality (VR) and augmented reality (AR) are other areas likely to improve dramatically with the introduction of 5G.
Opportunities for business
China’s advances and applications of 5G provides a glimpse into the future, and should be followed closely by all companies, whether working digitally or not. Through 5G, companies will be able to bring robots and information into the cloud, which translates into a more systematic supply chain, better communication between systems and ultimately a more optimal resource allocation and improved productivity. As Ericsson puts it, 5G represents “a great potential for service providers to create and capture new value in the consumer business”. A few examples include:
Extremely fast internet: The speed of the internet is highly correlated with productivity, and opens completely new doors for business, and new business models. One example of this, is remote-control surgery, where the best professional surgeons will be able to operate patients that are far away. This means that the best doctors can undertake operations while sitting hundreds or
even thousands of kilometres away from patients. 5G’s high-speed data transmission makes the time-lag from the doctor to the robot as little as 0.1 seconds, which is enough to avoid potentially deadly mistakesIncreased connectivity: With 5G, information will be shared between multiple intelligent devices, and boost the digital sharing economy, with a huge potential for companies to change existing production methods.
Industrial robotics: Rising labour costs has motivated China to install robots at an unprecedented level to increase competitiveness and reduce costs. In 2017, China was the largest installer of robotic units with a total of 138,000 installations – more than triple Japans installations that year. With 5G, companies with industrial robots will be able to optimize production and supply
chains through increased efficiency and communication between intelligent devices facilitated by Internet of Things, big data and cloud computing.
What about the west?
The trade war between China and the US and the sanctions applied to the world’s largest equipment maker, Huawei, undeniably affect China’s roll out of 5G. However, countries around the world are still looking to Huawei and its technologies when deciding on which supplier to choose, as they are simply technologically far more advanced and cheaper than most of their competitors.
In the UK, for instance, companies such as BT and Vodafone are heavily reliant on Huawei equipment in their 4G networks, and these companies are lobbying strongly against plans to cut of Huawei by 2023. In Brazil, the general attitude is that telecoms tenders should not be based on ideological battles, and that fierce competition in the 5G arena will lead to lower prices, to the benefit of the consumer.
For the EU and the US, the key issue is the lack of reciprocity in terms of market access as well as security. When foreign tech companies are denied full access to the Chinese market, while Chinese companies have access to all major markets in the West, China have an unfair advantage, which makes the road to 5G dominance shorter. Western competitors such as Ericsson and Nokia are simply taken out of the equation.
Chinese technology companies have tried to forge closer ties with European partners, to safeguard themselves from US export restrictions and other measures. According to MERICS, the berlin-based think tank on contemporary China, this is, however, only a short-term solution. In the long term, companies, such as Huawei, will need to move design and manufacturing in-house, and rely more on domestic partnerships.
WHO SAID 5G? HOW ABOUT 6G!
China is often quick to spot new trends and invest in future technologies, and mobile networks is no different. In addition to the strong focus on 5G outlined above, China has established a working group under the Ministry of Science and Technology specifically tasked with developing Chinas capabilities within 6G. According to a notice (link in CN) from the ministry, China has formed two teams that will oversee the research and development of 6G.
While the initiative is still in its infancy, it underlines China’s ambition to lead the field and advance by leaps and bounds. While the West focuses on the latest technology, China is focusing on the next one!