It’s the U.S. vs. China in the 5G Olympics
Russia might be winning the cyberwars, but it’s China that is emerging to challenge the United States for Global 5G dominance. This issue has crystallized in days pre- and post- the 5G-themed Mobile World Congress. Huawei continues to be blocked from competing in the U.S wireless infrastructure market, and the major U.S. operators were pressured to not sell its phones. Earlier this week, the Committee on Foreign Investment in the United States (CFIUS) stepped in to review Broadcom’s purchase of Qualcomm, over concerns about Broadcom’s relationships with foreign entities, and the possibility that it would sell off piece parts of Qualcomm to…China.
Much of this revolves around concerns about threats to national security, and it looks like 5G is going to be an important battleground. While Europe led the 3G revolution and the U.S. led 4G LTE development and deployment, China is emerging as a major force in the nascent 5G market. Huawei gained significant global share during the 4G era, mainly due to aggressive pricing that made it difficult for companies such as Ericsson and Nokia to compete in many markets outside the U.S. Now, Huawei is seen as an innovator, and offers a 5G kit that is competitive with, and in some respects exceeds, that of its other global competitors. It is also doing leading-edge work in nearly every other telco/Internet infrastructure segment you can think of, from IoT to NFV and cloud.
Second, the Chinese government is playing an active role, investing in infrastructure, and promoting the 3.5 GHz spectrum as a global 5G band. In fact, the pressure being exerted on the FCC to allocate more mid-band spectrum is largely the result of what’s happening in China. And while we dither over issues such as small cell siting and can’t find a way to invest in infrastructure projects, the Chinese are running laps around us with initiatives such as ‘One Belt One Road.’ You can bet that all those road and rail projects will pave the way (or lay the track) for lots of telecom infrastructure deals.
Third, the sheer size of China’s market and workforce has become an incontrovertible force. It is the world’s largest wireless market, by far. And the country’s growing wealth is allowing Chinese students to study at leading U.S. universities and take that knowledge back with them back home.
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