GBA Brief

China sounds the starting gun on 5G with licence approvals

Regulators have just granted the much-awaited commercial licences for 5G. Services should be available to customers within three or four months. Expect the GBA to be a touchstone market.  

That didn’t take long. Only a couple of days after China’s telecom ministry said that it was getting ready to grant the commercial licences for 5G services, it has done the deed, awarding them to the three main telcos – China Telecom, China Mobile and China Unicom – plus the China Broadcasting Network.

The licence approvals have arrived earlier than expected and the sense is that there is a new urgency in the plans for 5G because China wants to be the first country into large-scale commercial deployment. 

China Mobile, the largest of the domestic telecom operators, was straight out of the blocks, saying that it would start offering 5G in more than 40 Chinese cities by the end of September.

The news is also a timely boost for Huawei, which plans to build the majority of the networks that make 5G possible. It soon put out a statement welcoming the news and saying that it was ready to advance the rollout across the country.

Of course, that skirts the question that we asked earlier this week about whether it has enough of the equipment to deliver a scaled rollout at speed, following the Trump administration’s ban on the supply of American components to the Shenzhen giant.

Most analysts seem to think that Huawei has the supplies to meet its construction commitments for the remainder of the year, but that it could run into problems soon after that if the row with Washington isn’t resolved.

In the meantime Huawei has been brushing off concerns about a production bottleneck, announcing another huge deal this week to build a 5G network in Russia in the year ahead. 

In the short term there should be more focus on the rollout in Huawei’s home base of the Greater Bay Area, whose consumers will be some of the earliest beneficiaries of the new services. Progress there will be watched even more closely because the next-generation standard is now a touchstone issue in the Chinese government’s increasingly bitter wrangle with Washington. Huawei says that it has already signed 46 5G commercial contracts in 30 countries, shipping more than 100,000 base stations. But if it runs into difficulties delivering the network in its home base, there will be questions about how it is going to meet its overseas commitments.

Put simply, things need to go to plan in the GBA first.