World's Biggest Wireless Carrier Awards First 5G Equipment Contracts

China Mobile awarded its first batch of 5G equipment contracts to the likes of Huawei and ZTE, though it did include Ericsson and Nokia in the process.

Mike Dano, Editorial Director, 5G & Mobile Strategies

June 11, 2019

2 Min Read
World's Biggest Wireless Carrier Awards First 5G Equipment Contracts

Just days after the Chinese government gave the green light for commercial 5G deployments, China Mobile -- the world's largest wireless network operator by customers -- said it had awarded its first round of 5G network equipment contracts.

Unsurprisingly, domestic suppliers Huawei and ZTE walked away with the bulk of the winnings, though Sweden's Ericsson won 12% of China Mobile's business, while Nokia won 6%.

Figure 2:

The contacts mainly relate to China Mobile's core network equipment and devices.

Analysts viewed these equipment awards as symbolic of the 5G network deployment activity underway in China.

"Although this is a small tender, as China Mobile will only procure 1,131 units of equipment under it, we believe it marks the acceleration of 5G network rollout," wrote the analysts at Wall Street research firm Nomura. "Moreover, China Mobile has chosen the NSA [Non-Standalone] model for 5G deployment this time, as the company targets to provide 5G coverage in 40 cities in 2019 and NSA should be easier to execute compared to the SA model (standalone). This echoes our view that China is pushing ahead with 5G development in order to offset the potential impact of a trade war and Huawei's ban by the US."

The Nomura analysts also noted that China Mobile is now accepting bids for the first phase of its 5G buildout -- totaling $2.7 billion -- which the operator said will cover 40 Chinese cities with 5G by the end of September. The analysts noted they expect China Mobile to award most of those contracts to Huawei and ZTE.

China Mobile counts almost 1 billion wireless customers. To put that into perspective, Verizon is the biggest wireless network operator in the US, with about 150 million customers. There are around 330 million people living in the US and roughly 1.4 billion people living in China.

Last week, China's government granted 5G licenses to existing operators China Mobile, China Telecom and China Unicom, as well as state-owned China Broadcasting Network Corp. The government also cited data from the China Academy of Information and Communications Technology predicting that Chinese wireless network operators would spend up to $223 billion between 2020 and 2025 building 5G networks.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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