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5G networks

Chinese 5G investment set to quicken with 1st licenses ready

Big three wireless carriers poised to receive approval as early as this month

Visitors take pictures under blooming cherry blossoms near a high-resolution AI camera at a Beijing park in March.   © Reuters

BEIJING -- China's government will as early as this month allow the nation's three leading wireless carriers to operate 5G communication networks, accelerating the rollout of an estimated $180 billion in nationwide investments, industry watchers said.

The Ministry of Industry and Information Technology said on Monday that it will issue 5G licenses "soon," the state-run Xinhua News Agency reported.

Sources at the ministry said the initial approval will go to state-owned China Mobile, China Telecom and China Unicom, which have more than 1.5 billion combined subscribers.

The ministry has designated 2019 as the starting year for commercial fifth-generation service in China, according to the Xinhua report. Industry sources said this phrase suggests Chinese carriers will move forward network investments.

Previously announced government plans had put the start of China's commercial 5G service in 2020, following trials this year.

The accelerated pace of investment may be meant as support for embattled Chinese telecom equipment maker Huawei Technologies, which has been shut out of a number of foreign 5G network projects on information security fears.

Huawei is a major supplier of network equipment to Chinese carriers. When China Mobile held a round of bidding for base stations in January, Huawei took half.

The three Chinese state-owned carriers' listed units -- China Mobile, China Telecom and China Unicom -- have announced around $4.5 billion in combined 5G-related investments for 2019. Their spending is expected to balloon once the 5G licenses are issued.

China Mobile displays a self-driving street sweeper and other vehicles, part of the wireless carrier's plans for using 5G networks to power infrastructure. (Photo by Shunsuke Tabeta)

By comparison, leading Japanese carriers NTT Docomo and KDDI have each forecast only about 1 trillion yen ($9.23 billion) in 5G investments over five years.

Chinese smartphone makers including Xiaomi are preparing to release 5G-compatible phones, a trend that industry watchers say could stimulate flagging phone sales at a time when Beijing seeks to boost consumer spending.

Foreign suppliers seeking opportunities in China's 5G must contend with rising U.S. pressure on Huawei and other Chinese manufacturers, which face the prospect of restrictions on their access to American technology.

China's industry and information ministry credited foreign companies -- including U.S. chipmakers Qualcomm and Intel and European telecom equipment suppliers Nokia and Ericsson -- with helping lay the groundwork for the country's 5G networks.

China remains open to foreign participation in 5G network development, the ministry said.

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