President Trump has said 5G is a race that the U.S. must win. But some telecom-industry leaders say Beijing is poised to vault ahead in coming months.
On either side of the brown river running through this misty mountain village, residents live in wooden huts without window panes. Chickens and cats mingle on the road.
President Trump has said 5G is a race that the U.S. must win. But while American wireless carriers are leading in early deployment of the technology, some telecom-industry leaders say Beijing is poised to vault ahead in coming months. In the U.S., where residents are prone to complain loudly about new cellphone towers going up next door, Washington’s strategy is far from unified. The White House hasn’t taken an important step to clear the military from valuable 5G airwaves, while measures from the Federal Communications Commission meant to fast-track 5G have actually created infighting among Washington, municipal governments and private wireless carriers, which are now suing one another.
“By the end of this year, it’s clear that China will have more 5G than any other place on the planet, and by the end of 2020, they’ll have 100 million 5G users,” said Chris Lane, a Bernstein analyst and former strategy director for Vodafone Group PLC, the world’s No. 2 wireless carrier by subscribers behind China Mobile. “That’s far more than any other country.”
Being first to a new technology isn’t always everything. The Soviet Union beat the U.S. to space but not in landing astronauts on the moon. In telecom, European countries pioneered cellular networks in the 1990s. Then American companies rallied to globally dominate the technology that powers today’s mobile internet.
U.S. wireless providers are expected to outspend their Chinese counterparts on 5G capital expenses, $284 billion to $179.8 billion, from 2018 to 2025, according to data from GSMAi, the research arm of a global wireless trade group. But because it’s so much cheaper to build 5G in China, that country is projected to have five to 10 times as many major cellular sites over the next five years, said Stefan Pongratz, an analyst at telecom research-firm Dell’Oro Group.
Beijing gives its carriers the spectrum and real estate—the government decides land-use rights in China—at a low price. And it is employing strategies that make efficient use of both. The military and video-broadcasting satellite operators, among other organizations, hold much of these coveted middle frequencies in the U.S. A Pentagon advisory board in April suggested that the military share this spectrum, while satellite operators propose selling some of theirs to wireless carriers for billions of dollars.
Chinese carriers will also build new towers, which shouldn’t take long once they identify the ideal land plots. “If it’s public use, we will just build there,” said Ouyang Xintian, a China Mobile senior technician, in an interview in Tongguan’s council building, next to one of the elaborate multitiered wooden towers that dot the region.
American wireless carriers also share. About 60 to 70% of U.S. towers have more than one tenant, Mr. Schmidt said, with an average of 1.5 tenants per tower. But he said carriers often don’t want to share the fiber-optic cable, which forces rivals to go through the expensive process of digging new lines for wires.
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