Wednesday, 08 August 2018 06:19

US well behind China in race to 5G wireless: report Featured

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US well behind China in race to 5G wireless: report Pixabay

China is well ahead of the US in the 5G race, outspending the latter by about US$24 billion since 2015 to set up wireless communications infrastructure and building 350,000 new sites, a report from Deloitte Consulting claims.

In the same period, the US had built less than 30,000 new sites, the report said, adding that China's current five-year economic plan had allotted a sum of US$400 billion for investments related to 5G.

The report, published on Tuesday, said while the US, Japan and South Korea had made significant strides to be ready for 5G, they all lagged behind China.

"Infrastructure spend and tower density distinguish China’s leap forward and highlight the degree to which China outpaces the United States during these early stages of 5G deployment," it said.

The Deloitte report came in the wake of an announcement by the US Federal Communications Commission, laying out the rules for bidding on high-band spectrum which is expected to be used for 5G.

country 5g sites

China was building network site density at an unprecedented rate, the report said, adding that China Tower, the leading provider of sites, owned about 96% of macro towers, small cells and DAS sites that were used by the country's wireless carriers.

It said China Tower had invested US$17.7 billion and added more than 350,000 sites since 2015.

"China Tower has a total of approximately 1.9 million wireless sites, compared to approximately 200,000 in the US. This means the US has 0.4 sites compared to China’s 5.3 sites for every 10 square miles. Comparing tower density on a per capita basis is marginally more equitable, where the United States lags China by approximately three times," the report said.

arpu decline

China also had much lower costs for adding a carrier, with the Deloitte report estimating that the equipment necessary for adding a carrier was about 65% that in the US. Civil engineering and permits costs were about 15% to 20% of those in the US.

Deloitte said carriers needed to resolve how they would monetise their capital expenditure on 5G before they decided on budgets and time of deployment.

"While 5G will certainly enable new use cases that create entirely new products and services, growing national economies in the process, how much of that new value will flow to the carriers who enabled it is less certain," the report noted.

revenue per mb

It said average revenue per user from LTE had declined across all regions, leading to a fall in the revenue per MB. The decreasing amounts that customers paid for each MB of mobile data made it difficult for many carriers to spend what was needed for 5G.

But, on the bright side, the ability of customers to gain access to increasing amounts of data would be a potential boon to other industries and national economies, it said.

The report was authored by Dan Littmann, principal; Phil Wilson, managing director; Craig Wigginton, partner; Brett Haan, principal; and Jack Fritz, senior manager, all of Deloitte Consulting.

Graphics: courtesy Deloitte Consulting

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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