China's 5G rollout continues to grow on a prodigious scale.
According to official stats released last week, the operators now report 450 million users, accounting for 27% of all subs, and 1.15 million 5G basestations, supposedly more than 70% of the global total.
The handset industry has shipped 210 million 5G phones so far this year, up 69% over 2020 and representing nearly three-quarters of all handsets sold in China.
Without doubt the key underlying factor in China's spectacular assault on 5G is the role of the national government.
Besides its direct control of the operators, Beijing has made sure – through its high-profile national plans, the supportive media and the now-ubiquitous enterprise party committees – that the entire industry is on board with its 5G ambitions.
The leaders of the three telcos are all senior party appointees who do not need to be asked twice. They are evaluated on their 5G progress, so it is no surprise they are spending heavily, between them allocating 185 billion yuan (US$29 billion) for 5G capex this year alone.
They have also made sure 5G is available at ultra-low prices, with China Mobile's entry-level package around $12 a month.
The rapid 5G take-up is a result of these low prices, but with the unexpected impact of an outsized number of 4G subscribers buying the bigger 5G packages. According to the operators' numbers, the total number of "5G package" subscribers is 667 million – more than 50% higher than the number of actual 5G users.
These stats are all celebrated in China as signs of its 5G "leadership." Yet, while impressive, they are not terribly revealing.
The raw basestation count, for one. The operators and the MIIT do not disclose the kind of meaningful network rollout data used by operators in the rest of the world, like percentage of population covered.
So we know nothing about the actual reach of China's giant 5G project. Most likely, the two giant networks – China Mobile's and the shared China Telecom-China Unicom network – each covers exactly the same population.
Which leads to the second problem – the distortions of a top-down plan driven by bureaucratic dynamics rather than market needs.
Major cities have rushed to offer rent and tax rebates to speed up rollouts and, of course, to catch the eye of their Beijing bosses.
According to Light Reading's count, a year ago the wealthy cities of Shanghai, Beijing and Shenzhen accounted for nearly a third of the total 5G rollout.
That is why the MIIT's new five-year plan makes a point of demanding that 5G be extended to 80% of all rural administrative villages by 2025. Currently, 5G is available in exactly 0% of them.
The other problem in this approach is the built-in irrational exuberance. Since launching 5G, the telcos have worked tirelessly to build out a portfolio of enterprise use cases, as anticipated by the national 5G plans. China Mobile, for one, has developed 470 enterprise apps and nine industry platforms.
But the operators are now tapping out, acknowledging the futility of developing thousands of customized applications, most of which they now admit are "showroom-only." That's without getting into the complexities of telco generalists trying to sell into highly specialized segments.
The scale of China's supply-side 5G project is eye-opening, but in reality it is a story of a rapid rollout and low consumer prices.
— Robert Clark, contributing editor, special to Light Reading