China will go from initial 5G launches in 2020 to becoming the planet’s largest 5G market in terms of connections 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 [PDF], which was released at Mobile World Congress Shanghai – notes that Chinese cellcos plan to run a phased testing period for 5G networks from this year to 2019 before launching commercially in 2020. Following commercial deployment, the report forecasts that 5G connections in China will reach 428 million by 2025, accounting for 39% of the 1.1 billion global 5G connections expected by that point.
5G connections (excluding IoT) are anticipated to reach 670 million in Asia-Pacific by 2025, accounting for just under 60%of global 5G connections 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.
That latter point is important because, according to the report, 4G penetration in China has increased fivefold to 61% 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 Chinese mobile operators are that 5G investment will follow a more gradual path over a longer timeframe than 4G – roughly seven years – from 2018 to 2025 – with capex not expected to account for more than 25% of operator revenue prior to commercial launch.
“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.”
In related news, another new report from GSMA Intelligence says that China and India will account for almost half of all new mobile subscribers expected to be added worldwide by the end of the decade.
The 2017 edition of the GSMA’s ‘Mobile Economy: Asia Pacific’ report forecasts that India will account for 27% (206 million) and China 21% (155 million) of the approximately 753 million new mobile subscribers expected to be added globally by the end of 2020. The Asia Pacific region as a whole is forecast to increase from 2.7 billion unique mobile subscribers1 at the end of 2016 to 3.1 billion in 2020, accounting for two-thirds of global growth.
The report also highlights how the region’s mobile industry will be a growing contributor to the Asia’s economy and social development over this period – and also play a pioneering role in 5G. While 3G and 4G are now the dominant technologies in the region, accounting for more than half of connections for the first time last year, Asian markets such as China, Japan and South Korea will drive development of 5G, the report says.
Mobile penetration in the Asia-Pacific region will grow from 66%in 2016 to 75%in 2020. However, the diverse nature of the region means that mobile penetration rates vary widely. Asia is home to four of the top five most penetrated markets in the world (Hong Kong, Japan, Singapore and Taiwan), but also some of the least penetrated, such as North Korea.