The global semiconductor shortage has put the brakes on China's 5G juggernaut.

Total capital spending by the three Chinese operators declined by 35% in the first half, with the number of new 5G basestations down 34% compared with last year. Spending on 5G by the two biggest telcos, China Mobile and China Telecom, slid 19%. The third, China Unicom, has not disclosed its 5G spending but said it had reached only a fifth of its full-year capex target.

The jointly owned infrastructure company China Tower also reported a 28% fall in capex to 10.4 billion yuan ($1.6 billion). In the biggest dip, China Telecom's 5G spend plunged 45% to RMB11.1 billion ($1.71 billion), just over a quarter of its full-year forecast of RMB39.7 billion ($6.1 billion). Total capex declined 37% for the half.

China Unicom revealed it had spent only RMB14 billion ($2.2 billion) of its 2021 capex budget of RMB70 billion ($10.8 billion), down 45% from 2020. It has a year-end target for 5G of RMB35 billion ($5.4 billion), the same as 2020. China Mobile's 5G investment of RMB50.2 billion ($7.8 billion) was 9% lower than last year, and only 46% of its full-year target of RMB110 billion ($17 billion).

The telcos maintain the same capex guidance for the full year of around 185 billion yuan ($28.6 billion), slightly up from last year's 182 billion yuan ($28.1 billion). But for China Telecom and China Unicom, those numbers look challenging.

Unicom said it had built just 80,000 new basestations in the first half and was aiming to deploy another 240,000 in the back half of the year.

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At an interim results briefing earlier this month, China Telecom executives acknowledged that some equipment had shipped "slower than expected." Executive vice president Liu Guiqing said the supply problems had been resolved and believed the company would be able to speed up construction in the second half of the year.

China Mobile has also attributed its lower 5G investment to issues around its partnership with China Broadcast Network in building a new 5G network in the 700MHz band. The main tender was let in July. China's 5G rollout is a high priority infrastructure project closely supervised by the national government.

The rollouts were accelerated as part of the $1.4 trillion "new infrastructure" program unveiled in March last year, intended to propel the economy out of the pandemic and support a future digital economy.

— Robert Clark, contributing editor, special to Light Reading