In a remarkable admission, global telecommunications giant Ericsson has stated that Western countries have halted large-scale 5G network construction, allowing China’s 5G deployment to surge ahead of the rest of the world. According to Ericsson, China’s rapid 5G rollout puts the country six years ahead of global 6G development.
Chinese telecom operators and equipment manufacturers are now focused on boosting 5G speeds to 10Gbps and evolving towards 5.5G. This remarkable lead can be attributed to a key factor – cost management.
China was the first to commercialize 5G networks, with its telecom operators initially adopting the more cost-effective NSA (Non-Standalone) model. However, they eventually transitioned to the SA (Standalone) model, while most countries outside China stuck with NSA, resulting in over 80% of global 5G networks being NSA-based.
China’s 5G buildout has been a global showcase, with the country accounting for 60% of the world’s 5G base stations so far. However, this rapid deployment has come at a significant cost, with China’s three major operators having constructed only 3.9 million 5G base stations compared to over 6 million 4G base stations. The high investment required for every 500 meters of 5G coverage has strained operator budgets.
To mitigate costs, China’s operators have launched low-frequency 5G networks, with China Mobile expected to have 600,000 low-frequency 5G base stations and China Telecom announcing 250,000 such sites. These low-frequency networks can significantly reduce the number of required base stations, with a single 700 MHz 5G base station covering a 3-kilometer radius, equivalent to dozens of mid-band sites.
While the United States has also been active in 5G deployment, focusing on millimeter-wave and low-band spectrum, its rollout has been more measured. AT&T used 450 MHz for 5G, while Verizon used millimeter-wave, but faced customer complaints about poor signal coverage in urban areas. Even so, neither operator has built a nationwide 5G network like their Chinese counterparts.
The high costs associated with 5G buildouts have deterred many global operators, allowing China to account for around 60% of the world’s 5G base stations, potentially rising to 70% when including the US contribution.
With 5G commercial adoption now over five years old, the question arises – what lies ahead? Ericsson predicts that the next 6G commercial rollout will happen by 2030, and global 5G investment is unlikely to increase significantly, forcing operators to control costs through measures like layoffs to maintain their capital streams.
As Chinese vendors strive to enter foreign markets dominated by Ericsson and Nokia, Ericsson’s assessment highlights the inability of countries outside China to keep pace with its 5G deployment. China’s 5G network will remain unrivaled, while foreign operators must wait for 6G’s commercial availability to restart their 5G buildouts.
The 5G race has seen Western countries lose ground and confidence, with China poised to extend its lead through the aggressive promotion of 5.5G, paving the way for greater 6G dominance. How Western nations will respond to this challenge remains to be seen.
