China Telecom Plans Commercial 5G Trials in 2019

China Telecom plans to conduct commercial trials of 5G technology in 2019 and says it will carry out "network field trials" in six Chinese cities in the latest sign of China's determination to lead the global deployment of the next-generation mobile technology.

The update appeared in a presentation and filing with the US Securities and Exchange Commission (SEC) earlier today as the Chinese telco, which competes against market leader China Mobile Ltd. (NYSE: CHL) and China Unicom Ltd. (NYSE: CHU) in its domestic market, reported growth in sales and profits for the first half of the year.

It comes after China's operators were last month reported to be planning pilots of 5G technologies in the second half of this year in the cities of Beijing, Shanghai, Chongqing, Guangzhou, Nanjing, Suzhou and Ningbo.

In a SEC filing, China Telecom Corp. Ltd. (NYSE: CHA) Chairman and CEO Yang Jie said: "We are deeply devoted to engaging in 5G standard formulation and technology trial runs while proactively exploring and researching the networking plan for the evolution from 4G to 5G."

"5G network field trials will be conducted in six cities and the joint research and development of 5G applications and solutions will be launched collaborating with cooperative partners from various industries, laying the foundation for 5G development," added Jie.

In a separate presentation published on China Telecom's website, the operator said that an "outdoor trial" focused on the migration from 4G to 5G technology would take place this year or next. A commercial trial has been scheduled for 2019, when pioneering operators in several other countries plan to activate networks based on the first 5G standard.

Following moves by the 3GPP standards group earlier this year, 5G new radio specifications are due to be frozen at the end of this year instead of in mid-2018, as originally planned. That should allow vendors to begin working on standardized 5G equipment sooner than was previously expected. (See 3GPP Approves Plans to Fast Track 5G NR.)

It means a version of 5G technology called non-standalone, which uses the 5G new radio in conjunction with an existing 4G network, could arrive in the market in 2019 rather than 2020, as the industry originally anticipated.

Nevertheless, there is skepticism that services launched in 2019 or 2020 will be available outside a few hotspots, such as city centers and sports stadiums. While the first 5G standard should support much higher-speed connections than are possible on today's 4G networks, operators may be in little rush to spend heavily on 5G deployment while their service revenues remain under pressure.

China Telecom, at least, was able to report a 4.1% year-on-year increase in operating revenues for the first half of 2017, to more than 184 billion Chinese yuan ($27.6 billion), thanks to soaring adoption of 4G services among Chinese consumers.

The operator picked up another 14.9 million mobile customers in the six-month period, giving it 229.9 million altogether. And with customers upgrading to higher-speed connectivity services, it added another 30.2 million 4G subscribers, leaving it with 152 million in total at the end of June.

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There was also growth at China Telecom's fixed-line business: It added 5 million broadband customers, giving it around 128 million overall, and grew its fiber-to-the-home (FTTH) business by more than 11 million, bringing the total to more than 117 million. That means relatively few broadband customers are not using FTTH networks.

More will have the option of doing so by the end of this year, with China Telecom planning to extend FTTH coverage to 240 million "ports" from around 230 million at the end of June.

The FTTH investments will give China Telecom "full fiber network coverage in cities, towns and villages," said the operator in its presentation. That infrastructure could also support the 5G plans, providing "backhaul" for the higher-speed mobile technology.

Sales growth fed through into profits, with net income rising 7.4% for the first six months, to about RMB12.5 billion ($1.9 billion), compared with the year-earlier period.

Despite the stellar performance, China Telecom remains a long way behind China Mobile in China's thriving mobile-phone market.

Earlier this month, the market leader claimed to have 867 million mobile customers in China, including 594 million on its 4G network.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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