China just switched on the world’s largest 5G network. The country’s three state-run telecom operators launched services for the next generation wireless technology on Friday.
China Mobile (941.HK), China Telecom (728.HK) and China Unicom (762.HK) are all offering 5G plans that start at 128 RMB for 30 GB of data per month, giving Chinese internet users access to the ultra fast service. 5G commercial services are now available in 50 cities, including Beijing, Shanghai, Guangzhou and Shenzhen, according to Chinese state news agency Xinhua. In Shanghai, nearly 12,000 5G base stations have been activated to support 5G coverage across the city’s key outdoor areas.
Other countries including the United States and South Korea launched 5G services in select areas earlier this year. But China’s commercial network is the biggest, according to Bernstein Research, giving the county more influence over the technology’s global evolution.
“The scale of its network and the price of its 5G services will have a pivotal impact throughout the supply chain,”Bernstein analyst Chris Lane
China has more mobile internet users than any other country, with about 850 million people using their smartphones to surf the internet, according to Xinhua.Analysts at Jefferies predict that China will have 110 million 5G users — about 7% of the country’s population — by 2020. South Korea launched its 5G network in April, and roughly 3% of the country’s internet users subscribe to it, according to Jefferies.
Huawei, the world’s largest telecommunications equipment maker and a leading smartphone brand, is playing a major role in China’s 5G network rollout. Europe warns that 5G networks could be hit by state-backed hackersThe Shenzhen-based company does business with all three Chinese telecom operators.
China Mobile, the country’s largest mobile internet provider, awarded nearly half of its 5G networking contracts to Huawei, according to state run newspaper China Daily. The rest went to rivals such as Ericsson (ERIXF), Nokia (NOK)and ZTE (ZTCOF). Huawei has been under pressure from a US campaign against its business. Washington has been urging countries to ban Huawei equipment from their 5G networks, alleging that Beijing could use it for spying.
Huawei denies any of its products pose a security risk. Despite the pressure, Huawei has found customers for its 5G products. The company said in an earnings report earlier this month that it had signed 60 commercial 5G contracts with carriers around the world, beating out rivals Ericsson and Nokia. Europe goes its own way on 5G and Huawei
Several Chinese smartphone makers have already started selling 5G devices in China. But Huawei is in pole position to dominate the market, “given its tight operator relationships in 5G network deployment, and control over key components,” according to Nicole Peng, an analyst with research firm Canalys.Peng said in a research note on Wednesday that local rivals including Oppo, Vivo and Xiaomi will “find it very hard to make any breakthrough.”