5G Rolled Out in China in 2019, and the Country's Unique Regulatory Environment is Key to Accelerated Expansion

5G rolled out in China in 2019, and since then, more than 2.2 million 5G base stations have been built in the world’s most populated country. Of the 1.6 billion mobile subscribers in China, 833 million of them are 5G subscribers (as of 1Q 2022). With 5G momentum picking up in the Asia-Pacific region, it’s worth taking a closer look at the 5G situation in China—the biggest cellular opportunity not just in the region, but in the world.

5G Regulatory Environment in China

In charge of regulating China’s industrial branches and information industry, the Ministry of Industry and Information Technology (MIIT) is the country’s regulatory agency for 5G. The MIIT is focused on encouraging further development of crucial technological equipment and innovation in the telecommunications sector. By 2025, 5G will account for 52% of network connections in China and MIIT’s regulatory efforts will be a crucial piece of this market proliferation.

As part of MIIT’s efforts, the agency has published a 5G regulation that aims to stimulate network sharing and promote commercial partnerships between Mobile Network Operators (MNOs). The regulation stems from MIIT’s “5G Network Co-Build Co-Share Framework Cooperation Agreement.” Providing subsidies is one of the most common tactics used by Chinese municipal governments (e.g., cities and provinces) to facilitate the regulation.

Below are some recent 5G regulatory developments in China:

• To develop 5G infrastructure in the Guangzhou province, the Guangzhou municipal government has previously allocated US$4.3 million in 2019 for China Mobile, China Telecom, and China Unicom.
• US$1,400 was granted by the Shenzhen municipal government for each Standalone (SA) 5G base station deployed.
• China Unicom, after being given approval by the MIIT, was granted US$29.2 million (RMB200 million) in subsidies for re-purposing the 900 Megahertz (MHz) Radio Frequency (RF) for expanding its 5G network to rural areas.
• The MIIT announced at the 2022 China 5G + Industrial Internet Conference that the Commercial Aircraft Corporation of China (COMAC) was granted a license for its first private 5G network. The network, meant for manufacturing plants, will use the 5.925 GHz – 6.125 GHz frequency bands and the Millimeter Wave (mmWave) 24.75 GHz – 25.15 GHz frequency bands at its manufacturing plants.

Cellular Landscape

In China, four Communication Service Providers (CSPs) offer 5G services:

• China Mobile
• China Telecom
• China Unicom
• China Broadnet (previously known as China Broadcasting Network)

In terms of service revenue and subscriber base, China Mobile is the largest 5G MNO in China, followed by China Telecom, China Unicom, and the newest 5G player, China Broadnet. China Mobile serves 557 million 5G customers using its sizable infrastructure apparatus of a cumulative 1 million 5G base stations across the country.

The MIIT’s partnership-promoting regulation has been clearly seen among these Chinese telco firms. For example, China Telecom and China Unicom divide the construction of 5G infrastructure into Northern and Southern cities—which includes Shanghai, Beijing, Tianjin, Nanjing, and the Jiangsu province. More than 700,000 5G base stations between the two companies are operated by China Telecom and China Unicom. Some major feats accomplished through the partnership include the development of the world’s first 5G network using 200 MHz of contiguous spectrum in the 3.5 Gigahertz (GHz) band and a total cost savings of US$11.2 billion (RMB80 billion) in capital expenses.

While China Telecom and China Unicom work together to expand 5G coverage, the country’s newest MNO, China Broadnet, has found an ally in the regional telco giant, China Mobile. Through this collaboration, China Broadnet can access China Mobile’s 2.6 GHz network in exchange for China Mobile being able to capitalize on China Broadnet’s 700 MHz frequency for 5G rollout. On the infrastructure front, the two Chinese telco companies have deployed 400,000 5G base stations together throughout the nation.

How Does 5G Licensed Allocation Work in China?

The cellular spectrum allocation process in China is unique. For a Chinese MNO to acquire 5G spectrum allocation, the MIIT grants licenses to operators directly. This is in contrast to the spectrum being issued through a public tender. With a more direct process of spectrum allocation, the speedy rollout of 5G in China has been made possible.

The following list shows you which spectrum frequencies each CSP has received 100 MHz of bandwidth in:

• China Mobile: Mid-band 2.6 GHz and 4.8 GHz RF
• China Telecom: Mid-band 3.5 GHz
• China Unicom: Mid-band 3.5 GHz
• China Broadnet: Low-band 700 MHz

In Good Position

Overall, China is a global leader in 5G technology with four key CSPs and major telco equipment vendors like Huawei and ZTE easing the commercial rollout process. Being the most significant market in Asia-Pacific, other countries in the region will likely try to mimic parts of China’s 5G rollout plans. Behind the expedition of 5G network deployments in China is the country’s national regulator, the MIIT. By encouraging mobile operators to work together, the MIIT has shaped a cellular market in which Chinese operators gain 5G network competencies they otherwise would never have.

Now, to learn about some of the major enterprise 5G use cases in China and the greater Asia-Pacific region, head over to the ABI Research website and read our 5G Private Networks in Asia-Pacific: A US$13.5 Billion Opportunity Spurred by Digitalization Research Highlight.

This content is part of our subscription-based 5G Markets Research Service.