Facing down the China 5G challenge: Don't panic

China's 5G market has some big numbers, but the country may struggle to execute its strategy.

Robert Clark, Contributing Editor, Special to Light Reading

February 2, 2021

3 Min Read
Facing down the China 5G challenge: Don't panic

There's no shortage of advice for the new team in Washington on how to handle the tech contest with China.

So a few more thoughts on Huawei and 5G can't hurt.

When it comes to Huawei, most telecom people would like to see a little less proscription and a little more cooperation, but that's not going to happen.

The push for open RAN is a step in the right direction in trying to reduce Huawei's dominance, and is certainly a better bet than the dubious option of the government trying to back its own winner, Beijing-style.

But it will take time. Even with the world's biggest bucket of money, telcos aren't going to swap out their legacy kit for cloud platforms in the next five years.

The timeline is important in thinking about 5G as a whole as well. Yes, eventually 5G is going to underpin a vast swathe of every economy, but that process has barely started.

It will take until the middle of the decade – at least – before it becomes an essential economic input. Meanwhile, the technologies will change, as will the winners and losers.

To channel Douglas Adams: don't panic.

China's 5G numbers might look overwhelming but the quantity is well ahead of the quality.

The people in charge of China's telcos are government appointees who are measured against their rollouts. They have every incentive to build big and fast and to get creative on the numbers.

For similar reasons, many cities are getting in on the 5G game. Just three cities account for around 30% of the total rollout – which means either that their numbers are overstated, or that China's 5G has little reach outside a few urban areas.

The big three operators have racked up huge subscriber numbers, which means a powerful installed base that can drive innovation in consumer apps.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

But the real challenge in China will be in the industrial Internet.

China doesn't have the big software-as-a-service companies like Microsoft or Oracle, or the sophisticated business customers of the US or Europe who are willing and able to adopt new tech.

Cloud adoption by Chinese firms is very low, productivity growth appears to have stalled and a lot of businesses aren't keen on the idea of paying for software.

These shortcomings explain why China is putting so much effort into its industry modernization program, Made in China 2025, and into new tech like 5G, AI and autonomous driving.

It is tipping a lot of money into some big bets, but it's by no means clear that it has the ability to execute.

So don't rush, don't panic and don't overestimate China's strengths.

— Robert Clark, contributing editor, special to Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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