New Study from GSMA and CAICT Forecasts That China Will Be the World’s Largest 5G Market by 2025
Chinese operators are on track to launch commercial 5G networks by 2020 and are expected to establish China as the world’s largest 5G market by 2025, according to a new study by GSMA Intelligence and the China Academy of Information and Communications Technology (CAICT). The new study ‘5G in China: Outlook and Regional Comparisons’, which was published today at GSMA Mobile World Congress Shanghai, explores the near-term outlook for the testing and commercial launches of new 5G networks in China and other advanced Asia markets, and the potential 5G use cases for both the consumer and enterprise markets.
“Operators in China are collaborating closely with government and enterprises to launch what will become one of the largest 5G deployments in the world,” said Mats Granryd, Director General of the GSMA. “In its early phase, 5G will offer an enhanced mobile broadband experience that will enable next-generation consumer services such as augmented and virtual reality, while at the same supporting mission-critical applications across a range of industry verticals.”
China Prepares World’s Largest 5G Deployment
Mobile operators in China plan to run a phased testing period for 5G networks from 2017 to 2019 before launching commercially in 2020. Following commercial deployment, it is forecast that 5G connections in China will reach 428 million by 2025, accounting for 39 per cent of the 1.1 billion global 5G connections expected by that point.
Chinese operators are expected to deploy ‘standalone’ 5G networks, which will require the construction of new base stations to site 5G equipment, backhaul links and a core network. However, the report notes that another option being considered in several other Asia markets is to deploy ‘non-standalone’ 5G networks that would run on existing infrastructure supplemented by targeted small cell deployment in areas of high density, allowing 4G and 5G services to run in parallel.
4G penetration is China has increased fivefold to 61 per cent over the two-year period to March 2017 and there remains significant headroom for 4G growth. As a result, 4G and 5G networks are expected to co-exist in China for a considerable period of time. The rate of 5G network rollout and adoption in China is also expected to be slower than it was for 4G, which Chinese operators were able to deploy rapidly earlier this decade within a mature 4G ecosystem. On capex, indications from the Chinese mobile operators are that 5G investment will follow a more gradual path and over a longer timeframe than 4G, roughly seven years, from 2018 to 2025 – with capex not expected to account for more than 25 per cent of operator revenue prior to commercial launch.
5G Delivering New Consumer Services and Transforming the Enterprise
In their early phase, 5G networks will concentrate on boosting the capacity of 4G networks to support rising cellular data traffic demands. 5G will also enable enhanced mobile broadband (eMBB) services such as 4K/8K Ultra-HD video and augmented reality (AR) and virtual reality (VR) applications. Although some services will require devices with new form factors, the smartphone is expected to remain the principal 5G interface at launch. The first 5G smartphones are likely to be priced at a premium to 4G models, as they will require an enhanced chipset and RF module supporting multiple sub-6 GHz, and possibly extremely high frequency bands (mmWave), as well as, potentially, a 4K or 8K screen.
Meanwhile, it is the enterprise space that is considered to offer operators the largest incremental revenue opportunity. Operators are collaborating with the broader mobile ecosystem and vertical industry players to develop new services and business models that will utilise 5G networks. 5G will support applications that require massive scale or are mission-critical and therefore demand low latency. Key vertical markets for 5G applications include automotive and transport, logistics, energy and utilities monitoring, security, finance, healthcare, industrial, and agriculture.
The new report ‘5G in China: Outlook and Regional Comparisons’ is co-authored by GSMA Intelligence, the research arm of the GSMA, and the China Academy of Information and
About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 300 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai, Mobile World Congress Americas and the Mobile 360 Series of conferences.
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