China is outstripping the US in the race for 5G wireless

13 Aug 2018496 Views

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Man holding mobile device in Shanghai, China. Image: Captain Yeo/Shutterstock

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As untapped economic potential emerges with 5G technology, Deloitte warns that the US may risk losing macroeconomic leadership to China.

China is outspending the US and has more 5G base stations on the ground, giving it a huge economic lead in the 21st-century digital economy.

A new report by Deloitte reveals that China has spent $24bn more than the US on 5G infrastructure.

‘The potential economic benefits of 5G will soon become a key differentiator for cities looking to attract both businesses and residents’
– DAN LITTMANN

China has 350,000 base stations deployed compared with 30,000 in the US.

Even with this estimate normalised to account for the population-to-wireless-subscriber ratio, the study concludes that the US has underspent China in wireless infrastructure by $8bn to $10bn per year since 2015.

China towers over US in 5G stakes

Deloitte predicts that countries adopting 5G first are likely to experience disproportionate gains in macroeconomic impact. And China clearly has the lead as an early mover.

As a result, the US risks losing its technology leadership position unless swift action is taken to help unlock industry-wide investment in the country’s underlying communications infrastructure.

The report, titled 5G Deployment: The chance to lead for a decade, illustrates how China and other countries are outpacing the US in terms of wireless communication infrastructure spend, tower density and efficiency of execution.

“We predict that 5G will expand the network effect dramatically by extending the reach of the internet to almost any kind of connection, by almost any kind of device, anywhere a wireless signal can reach,” said Dan Littmann, principal at Deloitte Consulting.

“The potential economic benefits of 5G will soon become a key differentiator for cities looking to attract both businesses and residents. For the US to remain competitive and eventually emerge as a leader, the race to 5G should be carefully evaluated, and swift actions should be taken.”

The report notes that China’s five-year economic investment plan projects a total of $400bn in 5G-related investment.

Deloitte estimates that the equipment necessary to add a carrier in China is about 35pc less than the US, suggesting the latter would need to spend 2.67 times the amount that the former spends to generate an equivalent amount of wireless network capacity.

The report also notes that US tower companies and carriers added fewer sites in the last three years than China added in three months in 2017.

China now has 1.9m sites, 10 times more than the US, yielding almost 40 times the tower density per square mile, and three times the density on a per capita basis.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com