Looking in 2020's rear view mirror, and forward to 2021, the GSMA's Head of Greater China, Sihan Chen, investigates recent research from GSMA Intelligence, and shares her view of China and the 5G market.
The Covid-19 pandemic hit China's economy and mobile industry earlier than most other countries. But now, looking forward, the outlook for the Chinese mobile market is strong. And 5G is a key part of this story.
China's mobile operators saw their average service revenue growth turn negative by only
-0.8% in the first quarter of 2020, according to the "Global Mobile Trends 2021" report from GSMA Intelligence. That's a robust result, given the circumstances of the pandemic and lockdown.
The pandemic showed the true relevance of robust and resilient mobile networks. Globally, and especially in China, the mobile industry delivered flexible working, effective e-learning and telemedicine. It kept essential services running and the economy moving by making online spending possible.
The pandemic led to a rise in the use of digital and cloud-based services. This contributed to an acceleration push for an expanded telco offering. For example, China Unicom's industrial internet services and China Telecom's services spanning healthcare, remote education and business.
Operators in China reported strong service revenues for the third quarter of 2020. The post-pandemic recovery contributed to these results, as well as 5G subscriptions and larger data packages.
Consumers have a choice of 5G handsets with a wide price range. Some smartphones are below CNY2,000 ($300). There are attractive 5G data tariffs where 5G is typically available at a cheaper per-GB-price than 4G.
It's no surprise, therefore, that consumers in China are among the world's most keen to upgrade to 5G. Our digital consumer trends survey from GSMA Intelligence found that 62% of consumers in China said they intended to upgrade to 5G in 2020. That's a rise of 12% since 2019.
The strong impression is that 5G is a national new infrastructure in China. In fact, China now accounts for the vast majority (over 75%) of global 5G connections. This makes sense considering China's large population, the lowering costs of 5G handsets and the fact that there are almost 720,000 5G cell sites in China. In short, 5G infrastructure presence in China is by far the largest in the world.
China is set to have four mobile operators offering 5G services, including China Mobile, China Telecom, China Unicom and the recently established China Broadcasting Network (CBN). CBN is hoping to cover China's cities, towns and administrative villages with 5G, a footprint of 95% of the population. And with 5G network launches in Hong Kong, Macao and Taiwan, we expect to see over 200 million 5G connections in the region by the end of 2020.
Globally, 113 mobile operators have launched a 5G network in 48 countries. This year, following a slowdown in January and February, the pace picked up for 5G launches from March 2020, with eight new networks launched per month. This compares to fewer than six per month in the same period in 2019.
Launches are mostly in developed markets led by China, South Korea and the US. Developing countries like South Africa and Brazil are also entering the 5G era, although at a smaller scale as 4G adoption is still rising quickly in these countries.
As we explore in our "Region in Focus, China, Q3 2020" report from GSMA Intelligence,
another differentiator that sets operators in China apart is standalone 5G networks. For example, in June 2020, China Telecom and ZTE jointly announced the launch of China's first commercial 5G standalone massive MIMO (multiple-input and multiple-output) site. It will support the expansion of network capacity in dense urban areas with high-rise buildings.
Standalone 5G networks are needed for many industrial applications that demand security, low latency and high levels of reliability. Examples of vertical industries include manufacturing, transportation and healthcare.
With this focus on standalone 5G networks, we predict China will be well placed to become a market leader for these networks. In particular, for those standalone network solutions best suited for the enterprise market, such as network slicing, private networks and edge computing. It will also drive the standalone compatible ecosystem for equipment and devices.
MWC Shanghai and Leading 5G INnovation 5G will feature strongly at MWC Shanghai 2021, scheduled for 23 to 25 February 2021. Taking place at the Shanghai New International Expo Centre (SNIEC), it will be one of the largest and most anticipated events of its kind in recent months.
GSMA 5G IN seeks to uncover disruptors and new business models, as well as celebrate pioneers and innovators in the 5G field. The experience spans five themed zones: Better Future, Entrepreneurs, Industrial Applications, 5G mmWave, and XR. Attendees will experience leading-edge technology and revolutionary commercial, industrial applications, as well as the most forward-looking trends and insights.
5G is shaping the future, and China will continue to be at the forefront of this change. Every sector is undergoing deep transformation, and connected progress will stimulate global recovery and help us overcome the effects of the pandemic. For further details on exhibiting at or attending MWC Shanghai 2021, please visit www.mwcshanghai.com
MWC stands as one of the world's top three tech exhibitions next to CES and IFA. It focuses on "mobile" as it is hosted by Global System for Mobile Communication Association (GSMA), an alliance of mobile telecommunications companies and mobile phone and equipment manufacturers. MWC Shanghai is the Asian spinoff of this world's largest mobile and telecommunications exhibition, which the attention from telecommunication companies around the world and Korean companies are currently focused on with the recent rapid growth of the Chinese mobile market and the increased attention to the Asian market.