5G Investment Cycle About to Commence in China

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The 5G investment cycle is about to take off in China. The Ministry of Industry and Information Technology recently told reporters that they will issue 5G spectrum licenses before the end of the year, as well as formulating the frequency plan for the Internet of Things (IoT) and the Internet of Vehicles (IoV).

At present, many countries have already completed or are about to conduct 5G spectrum auctions.

In the past, mobile services (2G) were mainly used for interpersonal communications. Ten years ago 3G allowed internet data communications via smartphones. 5G, on the other hand, enables communication between people, from people to machines, and between things (IoT). It will be at least 10 times faster than the current 4G technology and it is expected to power self-driving cars, telesurgery, and the streaming of virtual reality games.

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In connection to this, Chinese smartphone manufacturer OPPO announced today that they have successfully connected to a 5G network for the first time.

Currently, China is only in the planning process of the 5G spectrum and has not yet allocated it to its three major operators: China Mobile, China Telecom and China Unicom. The industry believes that the spectrum allocation will affect the 5G development process. Because the allocation is not yet set, it leaves potential investors with great uncertainty.

Once the 5G spectrum allocation has been determined, operators will be more likely to invest and the 5G investment cycle can begin. Many brokerage research reports show that China’s 5G will be pre-commercialized in 2019 and officially commercialized in 2020. According to statistics from CSC Financial, operator investments in 5G are expected to reach 1.23 trillion yuan, a 68 percent increase compared to that of 4G.

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