In the Race to Dominate 5G, China Sprints Ahead

In the Race to Dominate 5G, China Sprints Ahead

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.

But this southwestern Chinese backwater has seen a glimpse of the future that even major U.S. cities such as Boston and Philadelphia still haven’t experienced. As part of a publicity stunt two years ago, a government-owned wireless carrier briefly flipped on a superfast 5G cellular network to broadcast a song-and-dance performance from members of the Dong ethnic minority.

This is the audacity of Beijing’s plan to roll out the next-generation wireless technology, which government leaders around the world say couldspark the next industrial revolution.

Not Phoning It In

Analysts say China will lead in building and spending on cellular infrastructure.

via newsapi.org

Wide-area 5G cellular sites by end of 2019

China

150,000

South Korea

75,000

U.S.

10,000

U.K.

2,500

Australia

1,000

Projected investment in cellular equipment in 2023

China

$12 billion

N. America

11

5G, short for fifth-generation wireless, promises to be the heartbeat of the future. Expected to be 100 times faster than today’s 4G networks, 5G’s seamless connections could enable innovations such as driverless cars, robot-run factories and remote surgery. Because 5G is set to be embedded in so many fields of endeavor, the country that dominates the technology is likely to reap outsize profits, attract top-tier engineering talent and seize an edge in other critical future technologies, including weaponry.

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.

via newsapi.org

In Tongguan, the 5G predecessor, 4G, has already improved life, allowing residents to video chat with relatives working in cities.


Photo:

Gilles Sabrié for The Wall Street Journal

While U.S. wireless carriers shuffle from city to city to introduce 5G, China plans to blanket urban areas with it by the end of next year and the rest of the country soon after. A local manager at one carrier estimated that even Tongguan, which lacks modern plumbing, could get the superfast networks by 2021.

“We look forward to 5G,” said Wu Shengmin, Tongguan’s baby-faced village chief. His locale boasts superb service on current 4G systems that would be the envy in much of the U.S., courtesy of a nearby cellular tower nestled in a tree-covered peak.

As it did in constructing its high-speed rail network and Olympic Games infrastructure, the Chinese government has flexed its authoritarian, top-down power to clear red tape for a 5G project that it deems a national priority. It has directed regulators, provincial and local governments and its three major state-owned wireless carriers to work together.

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.

American officials and wireless-industry leaders say they are clearing roadblocks and that the U.S. will maintain its lead in 5G, citing projections showing that a greater proportion of Americans will use the technology compared with the Chinese in a few years.

“Beijing can snap its fingers and put up untold cellular towers overnight, but in the long run, I have more faith in the U.S. system,” said FCC Commissioner

Brendan Carr,

the organization’s point person on wireless infrastructure. “Beijing is known for wasteful, debt-fueled spending on massive infrastructure projects. You don’t have to look further than some of the ghost cities across China.”

In June, the Chinese government granted 5G licenses to wireless carriers months earlier than anticipated. Days later,

China Mobile
Ltd.

awarded its first major contracts for 5G equipment, with Chinese cellular-equipment giant Huawei Technologies Co. winning the most deals. The country’s two smaller state-owned carriers said last month they were discussing jointly building and sharing a 5G system, a partnership that would save costs and speed construction. China’s first 5G networks will go live within weeks.

“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.”

China Dials It Up

China’s 4G networks are nearly as good as U.S. ones, and its early 5G systems will probably eclipse America’s in availability and, in nonurban areas, speed.

via newsapi.org

Mobile network, by location

Average

MEAN DOWNLOAD SPEED

Del.

Wyo.

Iowa

Miss.

D.C.

Texas

N.Y.

Calif.

FASTER

Xinjiang

Shanghai

Chinese

province

or region

Guangdong

Qinghai

Guizhou

Beijing

Tibet

18 Mbps

20

22

24

26

28

30

32

34

36

38

40

42

44

4G COVERAGE*

Calif.

R.I.

Vt.

W.Va.

Maine

Del.

Alaska

Wyo.

Mont.

D.C.

Average

S.C.

MORE COVERAGE

Shanghai

Guizhou

Texas

Guangdong

N.Y.

Chinese

province

or region

Hunan

Beijing

Xinjiang

Ningxia

Guangxi

72%

74

76

78

80

82

84

86

88

90

92

94

via newsapi.org

Mobile network, by location

Average

MEAN DOWNLOAD SPEED

Del.

Wyo.

D.C.

Iowa

Texas

N.Y.

Miss.

Calif.

FASTER

Xinjiang

Shanghai

Chinese

province

or region

Guangdong

Qinghai

Guizhou

Beijing

Tibet

18

20

22

24

26

28

30

32

34

36

38

40

42

44 Mbps

4G COVERAGE*

Calif.

R.I.

Wyo.

Vt.

Alaska

W.Va.

Maine

Del

Mont.

D.C.

S.C.

Shanghai

MORE COVERAGE

Guizhou

Texas

Guangdong

Hunan

Chinese

province

or region

N.Y.

Beijing

Xinjiang

Ningxia

Guangxi

72%

74

76

78

80

82

84

86

88

90

92

94

via newsapi.org

Mobile network, by location

MEAN DOWNLOAD SPEED

Average

Del.

Wyo.

D.C.

Iowa

Miss.

Texas

N.Y.

Calif.

FASTER

Xinjiang

Shanghai

Chinese

province

or region

Guangdong

Qinghai

Guizhou

Beijing

Tibet

18

20

22

24

26

28

30

32

34

36

38

40

42

44 Mbps

4G COVERAGE*

Calif.

R.I.

W.Va.

Wyo.

Maine

Del.

Mont.

Vt.

Alaska

D.C.

Average

S.C.

Shanghai

Guizhou

Texas

Guangdong

MORE COVERAGE

Hunan

N.Y.

Chinese

province

or region

Beijing

Xinjiang

Ningxia

Guangxi

72%

74

76

78

80

82

84

86

88

90

92

94

via newsapi.org

Mobile network, by location

MEAN DOWNLOAD SPEED IN MBPS

Chinese

province

or region

44

D.C.

Del.

42

FASTER

40

N.Y.

38

Qinghai

36

Beijing

Calif.

34

Average

32

Shanghai

30

Texas

28

Xinjiang

26

Guangdong

Tibet

24

Guizhou

Iowa

22

Wyo.

Miss.

20

4G COVERAGE*

94

%

R.I.

Del.

S.C.

Texas

92

Calif.

N.Y.

90

Average

D.C.

88

Maine

Ningxia

Guangdong

Mont.

86

Shanghai

W.Va.

84

Guizhou

82

Hunan

Guangxi

Beijing

80

MORE COVERAGE

Xinjiang

Alaska

78

Vt.

76

Wyo.

74

Just as America’s trailblazing 4G networks helped

Uber Technologies
Inc.

and Instagram reach global heights, 5G could turbocharge some Chinese companies. It might also help China’s efforts to stem a scientific brain drain that has led some of its brightest students to study abroad and then stay there.

“If you’re a scientist, where do you want to do it?” said retired Gen. Robert Spalding, who was essentially forced out of the White House’s National Security Council last year after proposing that the federal government play a bigger role in managing America’s 5G build-out. “You want to do it where they’re doing the research and have the money.”

Share Your Thoughts

Can the U.S.’s private-sector-led approach to next-generation 5G technology compete with China’s government-led approach? Join the conversation below.

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.

American government officials and telecom-industry leaders say the U.S. is beating China on 5G cellular sites available to consumers at the moment. Even if China pulls ahead on quantity, they say American networks may boast better quality, providing the higher speeds and reliability needed for the most complicated 5G technologies, such as remote surgery and virtual reality.

“Let’s be clear: The United States, not China, is leading the world in 5G,” FCC Chairman

Ajit Pai

said in a statement. “Right now, we have commercial 5G deployments in numerous cities across our country, while China has none.”

The merger of

T-Mobile US
Inc.

and

Sprint
Corp.

, approved by federal regulators but awaiting the outcome of a lawsuit by state governments, should help speed the U.S. build-out, FCC leaders say. Those two carriers, along with bigger rivals

AT&T
Inc.

and

Verizon Communications
Inc.,

have all launched 5G commercial service in several cities, and all the carriers plan coverage across the nation by the end of 2020, though, analysts say, on less infrastructure and largely on slower airwaves than in China.

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.

via newsapi.org

A young man checks his smartphone on the main road of the village.


Photo:

Gilles Sabrié for The Wall Street Journal

These cellular sites, or base stations, contain antennas and other hardware and form the backbone of modern communications networks. Base stations typically sit atop stand-alone wireless towers along highways, or on poles on rooftops. These base stations work similarly to Wi-Fi routers, connected by cables to the internet and wirelessly transmitting signals to a person’s cellphone.

China is on pace to have at least 150,000 5G wide-area base stations available for anyone to use, by the end of the year, more than any other country, said Bernstein’s Mr. Lane. Bernstein estimates South Korea will place second with 75,000, while the U.S. will have 10,000 such sites by the year’s end.

In the U.S., wireless carriers spend billions in Washington-run auctions for radio frequencies, or spectrum, for 5G. Then they spend billions more to lease real estate for cellular towers. Then they spend billions on top of that to build the actual towers and put hardware on them.

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.

via newsapi.org

Two young women in Tongguan watch a streaming video about make-up.


Photo:

Gilles Sabrié for The Wall Street Journal

For the most part, Washington has set aside two chunks of spectrum for 5G. One lets a cellular tower beam a signal over miles, but at speeds not much faster than 4G. The other chunk, which U.S. wireless carriers are focusing on, lets a tower zip data at superfast rates, but over only a few hundred feet.

China’s telecom regulator focuses on a third chunk, what telecom executives and experts callthe Goldilocks of spectrum: airwaves that blend fast speeds with transmission distances of about half a mile. One cellular tower in China can cover the same area as 100 high-speed American ones.

“Spectrum is very important in determining the costs of 5G,” said Huawei global vice president Daisy Zhu. “The U.S. has a problem with spectrum.”

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.

Only Sprint holds a significant chunk of these airwaves in the U.S. Mr. Carr, the FCC commissioner, said his agency is working with the Pentagon and satellite operators to free up this spectrum, and that U.S. wireless carriers could eventually have more of these frequencies than Chinese ones.

To carry the 5G signals, China is reusing existing 4G towers, requiring carriers to share towers and repurposing lampposts and other street fixtures.

via newsapi.org

Village boys playing online video games on their smartphones.


Photo:

Gilles Sabrié for The Wall Street Journal

The FCC last year set up strict “shot clock” deadlines to encourage local governments and utilities to share facilities with wireless carriers, but some telecom executives say the rules haven’t helped much. “There’s an unwillingness to share by the utilities,” said Ken Schmidt, head of Steel in the Air, a wireless-infrastructure valuation firm. “Without the sharing, it’s going to significantly limit the expansion of 5G outside dense urban areas for the next five years.” Mr. Schmidt said carriers are finding it faster just to build new towers.

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.

China Tower, the state-owned enterprise in charge of building cellular towers for the three Chinese wireless carriers, says it mostly uses state-owned land for ground sites.

In the U.S., about 95% of the grounds and rooftops suitable for cellular towers are privately owned, Mr. Schmidt said, with the average rent for a ground lease around $1,300 a month. The timeline from finding a location to having a working tower typically takes between one and six months, but in rare cases can stretch to two years, he said.The biggest delay is obtaining zoning permits from municipal governments, despite FCC efforts to speed up the process.

via newsapi.org

A 4G transmission tower looms over the village of Tongguan.


Photo:

Gilles Sabrié for The Wall Street Journal

A typical steel cellular tower costs $80,000 in the U.S. Because China’s telecom regulator mandates its three carriers to share towers, it is common to see three sets of antennas stacked on top of each other. They also cut equipment and energy costs by sharing power converters, the fiber-optic cables that provide connectivity and other equipment on or around the tower.

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.

And then there’s the cost of the telecom equipment itself, which includes the radios hanging on towers that wirelessly communicate with phones, as well as the giant routers and switches in climate-controlled rooms that make sure data gets to the right place. Telecom carriers spend $80 billion a year on it, and Huawei is the world’s biggest maker of the stuff by far. Its hardware is often more advanced and cheaper—by 20% or more—than equipment from Western rivals, say European wireless-carrier executives.

Washington has effectively banned Huawei from major U.S. networks over concerns that the company can’t refuse orders from Beijing to spy or conduct cyberattacks. Huawei denies it does the bidding of the Chinese government.

Cost savings and reduced red tape mean that wireless networks can affordably serve Tongguan village and its surrounding province, Guizhou, an infamously poor, mountainous region in the south akin to the West Virginia of China. Chinese officials believe that providing wireless service promotes better connectivity and economic opportunity, helping to alleviate poverty—a key goal of Chinese President

Xi Jinping.

4G was available across 97.3% of Guizhou in the first half of 2019, according to Ookla, a Seattle internet-speed research firm. West Virginia had 85.3%.

via newsapi.org

Wu Yinglei, a local entrepreneur, quit his job in the provincial capital and moved back to Tongguan to open a business selling food products online.


Photo:

Gilles Sabrie for The Wall Street Journal 

In Tongguan, 4G has already improved life; many elderly residents spend evenings video chatting with their children working in cities. 4G service helped persuade Wu Yinglei to quit his job brewing alcohol in the provincial capital in 2013 to return to Tongguan to open a business selling vegetables and a tangy homemade sauce of tomatoes and chili peppers. He uses his smartphone to sell the wares via an online store on China’s ubiquitous

WeChat

app.

“4G already makes our life better. In the past, we were isolated. Now our products and sauce are in high demand,” said Mr. Wu, now 35 years old, adding that he looks forward to 5G “so we can connect with the world.”

—Xiao Xiao
contributed to this article.

Write toStu Woo at[email protected]

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