China is winning the 5G race and the US is SO screwed: CTIA

5G China
Image credit: AlexLMX / Shutterstock.com

ITEM: China is winning the race to 5G. The US is not. US mobile industry group CTIA is very, very upset about that, and is now demanding that the US government Do Something about it for the good of the country before it’s too late.

This is based on two analyst reports commissioned by CTIA – one by Analysys Mason ranking 5G readiness in ten countries, and another from Recon Analytics demonstrating how the US “won” the 4G race, the economic benefits it received as its prize for winning, and what the US stands to lose if it doesn’t do the same with 5G.

Here are Analysys Mason’s Top 10 5G-ready countries:

5G readiness CTIA
Credit: Analysys Mason

The report doesn’t explain what those dots mean, but Analysys Mason says it studied 5G spectrum and infrastructure policies as well the commercial industry plans of each of the ten countries. China currently has the edge because “all major Chinese providers have committed to specific launch dates and the government has committed to at least 100 MHz of mid-band spectrum and 2,000 MHz of high-band spectrum for each wireless provider.”

The CTIA is worried that the US is only third on that list, not least because the other report from Recon Analytics emphasizes the economic importance of being at the top of the list [via the press release]:

“When countries lose global leadership in a generation of wireless, jobs are shed and technology innovation gets exported overseas,” said Roger Entner, Founder, Recon Analytics. “Conversely, leading the world in wireless brings significant economic benefits, as the US has seen with its 4G leadership. These are the serious stakes that face American policymakers in the escalating global race to 5G.”

That’s why CTIA president and CEO Meredith Attwell Baker is urging US policymakers to “reform local zoning rules and unlock access to mid-band spectrum as part of a broader spectrum pipeline plan” so that the US can “leapfrog China”, because “the United States will not get a second chance to win the global 5G race”.

My first thought:

What?

I confess I am bamboozled by the concept of 5G being a must-win race between nations. Because that was never really the case with the previous Gs. Yes, GSM was European in origin and CDMA was American, but only select politicians framed it as a specific US vs EU battle for economic supremacy. For the mobile industry, it was mostly about which technology was better and offered attractive economies of scale.

That said, there is this mad scramble in some markets to be the first on the block to launch 5G, although that’s more the usual operator brinksmanship. Certainly some governments are promoting 5G for the bragging rights about digital readiness and/or attracting investment.

But the CTIA and the Recon report seem to take that to the next level. What’s at stake here, according to Recon, is the GDP growth that comes with leading the generational charge. Much of that growth comes not just from the networks themselves, but much from the ecosystems that will grow on top of those networks. For example, smartphones and OS-based apps ecosystems were enabled by the spread of 4G network rollouts.

But Recon seems to be arguing that if you don’t have the networks inside the country, all that innovation will happen somewhere else. Yet operators work with overseas vendors all the time. It’s hard to believe Apple would never have invented the smartphone or apps stores if there had been no 4G networks in the US – in fact, there weren’t any 4G neworks at the time. Famously, the first iPhone didn’t even support 3G. So I don’t understand what Recon is getting at here.

Meanwhile, the GSMA has a ton of reports telling regulators that pro-mobile investment and spectrum policies will boost your GDP upwards at least several percentage points, create millions of jobs, and make your country a much better place for everyone. But again, Recon and CTIA argue that it’s not enough to invest in 5G – you have to lead that investment over every other country in the world or you will suffer the consequences … even if the consequences are that your GDP grows only (let’s say) 8% rather than 10%.

This may make sense to economists, but I’m struggling to think of 5G in terms of national competition for global economic dominance, or as a zero-sum game where one country’s advancement comes at the direct expense of everyone else. If nothing else, when you look at the above chart and see how narrow that gap is between the top three, it’s hard to believe that spells certain economic doom and failure for everyone below China on that list.

Consequently, I have my suspicions that the CTIA is mainly using these reports as a cattle prod to convince the FCC to step up its game in releasing 5G spectrum and making it easier to roll out small cells, etc. And, you know, fair enough. The GSMA is doing that with every government regulator who will listen.

But I also have a feeling that they’re banking on the Trump administration’s economic war with China, Congressional paranoia over vendors like Huawei and ZTE being spies for the Chinese government, and the worry by at least one person in the National Security Council that if Huawei wins the 5G race, China will somehow win control of the entire global internet (spoiler: it won’t, because that’s not how 5G or the internet work).

I’m guessing, of course. But I did notice that the CTIA report superficially seems way more concerned about China being ahead of the US in 5G than it is about South Korea also being ahead. I’m just saying.

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