China to issue licenses for 5G commercial use soon

The country is expected to spend up to RMB 1.5 trillion on 5G network construction before 2025.

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China to issue licenses for 5G commercial use soon

China’s Ministry of Industry and Information Technology (MIIT), which oversees the country’s mobile carrier networks, announced on its official WeChat feed today that it will soon issue licenses for 5G commercial use.

MIIT did not state an exact date for 5G commercialization to come into effect, though relevant stocks rallied after the announcement. ZTE and Datang Telecom, two Chinese telecoms equipment vendors, saw the prices of their shares go up by 5.32% and 4.51%, respectively.

The speedup of China’s commercial 5G roll-out is likely to be a huge boost for Huawei even as the company remains in the crosshairs of the United States government and some of its allies.

The US is pressuring other nations to drop Huawei from their supplier list and bar the Chinese company from participating in their 5G market.

By contrast, MIIT highlighted the contributions of foreign vendors—including Nokia, Ericsson, Qualcomm, and Intel—in China’s 5G trial period, and suggested that both domestic and foreign companies should be involved in the country’s numerous 5G opportunities.

“As always, we welcome domestic and foreign enterprises to actively participate in China’s 5G network construction and efforts to promote the application of the technology,” the ministry said.

In 2019 alone, China’s three largest telcos are expected to spend RMB 34.2 billion (USD 4.95 billion) on 5G-related infrastructure. Their total spending on 5G network construction is estimated to reach up to RMB 1.5 trillion (USD 217 billion) between 2020 and 2025, according to a report by Ernst & Young.

Earlier last week, a district in Beijing set up an RMB 5 billion (USD 720 million) fund for its 5G industry.