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Business

China Mobile, domestic rivals set sights on 5G

Three big telecoms curb investment to prepare for shift to faster network

HONG KONG -- China's top three wireless carriers are looking toward beginning fifth-generation service around 2020, with the two smaller players hoping to narrow the gap with leader China Mobile.

China Mobile said it will concentrate investment in 5G network infrastructure in 2019 and 2020. China Unicom and China Telecom both intend to limit investment in current fourth-generation technology to conserve resources.

Combined capital spending by the three companies for 2017 is expected to fall 13% from last year to 310 billion yuan ($45 billion).

"We need to set aside some capital" for the 5G rollout, China Unicom Chairman Wang Xiaochu told reporters March 15. The company plans to reduce capital spending by 38% to 45 billion yuan this year.

China Mobile has completed a round of 4G-related investment and will cut its capital spending by 6% from the previous year to 176 billion yuan. China Telecom will lower capital investment by 8% to 89 billion yuan.

China Mobile is far ahead of the competition, boasting 535 million 4G subscribers at the end of 2016, compared with 121 million subscribers for China Telecom and 104 million for China Unicom. China Mobile adopted the 4G standard whose development was led by the Chinese government, while rivals favored a separate standard that regulators initially held off on licensing, delaying construction of base stations.

Shang Bing, chairman of China Mobile, told reporters in Hong Kong that the company will seek to maintain the lead it took with 4G. The communications giant plans to wait for the government's assignment of 5G spectrum before determining the size of its investment.

China Telecom and China Unicom hope to reset the playing field with 5G.

China Unicom "won't commit the same mistake" with 5G as it did with 4G, Wang declared.

China Telecom Chairman Yang Jie recently said the company is not ruling out joint network building with China Unicom and other competitors.

China Mobile's net profit remained nearly flat for the year ended in December at 108.7 billion yuan. Its rivals both lost ground, with China Telecom's profit dropping 10% to 18 billion yuan and China Unicom's plunging 94% to 625 million yuan.

Japan's largest wireless company, NTT Docomo, reached its peak investment in 4G-related technology in fiscal 2014.

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