Sieren′s China: The race for 5G coverage | Asia| An in-depth look at news from across the continent | DW | 06.09.2018
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Sieren's China: The race for 5G coverage

China is leading the global race for high-performance 5G mobile networks. Any other country hoping to play a role in the digital economy will have to catch up fast, says DW's Frank Sieren.

There is a mobile network revolution coming. Some are even calling it a "technological Cold War." That might be an exaggeration, but what is certain is that whoever is leading the global race to develop 5G will set the pace for the future digital economy.

5G is 100 times faster than 4G, or LTE. It will significantly improve download speeds and streaming, which means it can support a whole host of demanding new technologies. It will help diverless cars share massive amounts of sensory data with satellites, for example, and smart-homes can easily connect every appliance to a single network. In the industrial sector, it will pave the way for efficient logistics chains and intelligent electricity networks, which direct power where it is needed, meaning lower costs and more green energy from solar cells and windmills.

China on equal footing from the start

For the first time in a modern technological revolution, China has entered the race on equal footing — and it's trying to make the most of it. When it comes to readiness for introducing 5G networks, China is ahead of other industrial nations. The country has 350,000 radio masts capable of supporting the technology, which is 10 times more than the United States, according to a recent study by the US consultancy firm Deloitte. Analysys Mason, a British consultancy firm, puts this down to a combination of "proactive government policies and industry momentum." Nowhere are the conditions better than in China at the moment.

Frank Sieren (picture-alliance/dpa/M. Tirl)

DW's Frank Sieren

The Chinese government intends to invest $400 billion (€344 billion) into developing 5G by 2020. Beijing considers the technology a crucial instrument for transforming China into a technology super power by 2025 — one that can compete with the West in every key area of the technology sector. China has spent $24 billion more than the US on 5G over the past three years. The country currently has full LTE coverage, which is a crucial precondition for upgrading to 5G. The potential number of 5G customers in China is huge, but the infrastructure costs are comparatively low. Beijing can rely on Chinese companies, starting with the southern Chinese telecoms giant Huawei, which not only sells more smartphones than Apple now but is also the biggest telecoms equipment provider in the world. The company has been conducting research into 5G for almost a decade and is involved in developing networks in a number of countries, including South Korea, Japan, France, Italy and Canada.

Setting standards

Whoever manages to introduce 5G first will not only be able to make huge profits, but will decide which hardware and software set the standards going forward — i.e. how we communicate in the future. Data is the oil of the 21st century.

The US in particular does not want to lose its place in the sun. Earlier this year, Secretary of Commerce Wilbur Ross announced that the development of new generation 5G was one of the government's priorities. A National Security Council memo leaked at the beginning of the year stated that failing to do so means China would win "politically, economically and militarily."

Watch video 01:14

Chinese telecoms giant Huawei unveils 5G test

Trump trips up China

US President Donald Trump is trying to put as many spokes in China's wheels as possible. In March, Washington blocked the Singapore-based semiconductor company Broadcom from merging with its US rival Qualcomm. The White House said that the takeover was a security risk for the US, as parts of Qualcomm could be sold to Chinese competitors such as Huawei — an absurd logic according to which the US would also have to bar the way to other countries in the telecoms business too, as they also could sell to China. The brakes were additionally put on the Shenzhen-based telecoms equipment company ZTE, which almost collapsed after the Trump administration said it would ban US suppliers from selling them parts. Trump changed his mind at the last minute, but it was a lesson to China. Its government and ZTE are now doing everything in their power to reduce dependence on the US market, which should not take more than a few years.

While Huawei has been excluded from the US networks market on suspicion of espionage, it is still working with Deutsche Telekom, Spain's Telefonica and the United Kingdom's Vodafone to develop 5G in Europe. The Chinese company is cheaper than the competition from northern Europe and the US.

Europe depends on cooperation with China

Europe and the US no longer have a common policy in this regard. The continent needs Chinese technology so as not to lag behind, as has been the case with LTE. According to a study by British company OpenSignal, Germany's network coverage ranks 32 out of 36 countries in Europe — just behind Albania. In order to be an "innovation leader" by 2025, the German government plans to auction sought-after 5G mobile frequencies via the Bonn-based German Network Agency at the beginning of 2019.

Deutsche Telekom, Telefonica and Vodafone will have to cooperate to create a dense network, something that telecoms companies are loath to do. The most recent bone of contention has been "national roaming," which would enable providers in regions that do not have their own mobile network to use those of rivals. Deutsche Telekom and other providers are against this and so far it does not seem as if they will have to make binding commitments. This will make it more difficult for newcomers to enter the market. The consequence of little competition is obvious: Germany will remain a country where there are dead zones even after 5G is introduced. 

Even when cars are driverless, someone will have to navigate.

Frank Sieren has lived in Beijing for over 20 years.

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5G: The next generation

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