China edges toward private 5G reformChina edges toward private 5G reform

Could 2025 be the year that China finally opens up 5G private networking to enterprise? The segment, which is finally getting some traction in the rest of the world, appears to be on a robust growth curve in China as well.

The big three telcos are clocking big numbers in terms of networks deployed and applications developed and launched over those networks. For example, China Telecom says it has built more than 16,000 5G private networks and launched more than 40,000 applications, with China Unicom reporting 15,000 networks and China Mobile a total of 46,000 5G commercial projects.

Unlike every other major economy, the operators monopolize the market. But the Ministry of Industry and Information Technology (MIIT) is signalling its clear intent to change this. The latest and strongest indication has come in its call for “the orderly implementation” of “independent” 5G private network trials.

The December 30 announcement instructs telcos and provincial governments to help "large enterprises and special industries" obtain spectrum for pilot networks. They should also "fully meet the needs of enterprises in terms of exclusive use and flexible deployment" of spectrum.

Precedent 

The ministry statement follows a number of other signals in recent months - most notably an invitation from the China Industry Internet Research Institute to enterprises and telcos willing to start work on private 5G. The notice was later deleted from its website.

There is also a precedent. One company – state aircraft manufacturer COMAC – was issued with spectrum in the 6GHz and 25GHz bands in 2022.

It's not clear why COMAC was chosen. But the fact that preference was given to a government firm in a critical vertical suggests that if further spectrum is to be allocated, other strategic state-owned organizations will be at the front of the queue.

The other factor may be that, despite the huge number of reported customers, the return for the telcos seems to be pretty meager.

China Mobile reported 3.9 billion Chinese yuan (US$532 million) in revenue from private 5G revenue for the first half of 2024. While that was a 54% improvement over the previous year, it seems a paltry sum for the sheer number of networks and client engagements. 

But the big question is over the MIIT. The ministry has set out its ambitions, but turning those into real change is another thing.