China grants commercial licences to 4 telecom companies to launch 5G services

A 5G logo is displayed at the Mobile World Congress

China has issued commercial 5G licenses to its three biggest telcos and state-owned China Broadcasting Network, as it looks to accelerate the deployment of the high-speed mobile technology ahead of its previous target.

China on Thursday granted 5G commercial licences to four domestic companies, as it races to be a global leader in advanced wireless networks amid fierce rivalry from the United States.

However analysts still believe the U.S. blacklist of Huawei will impose issues on its 5G business, even in China.

Asked whether China's move is linked to its trade war with the USA and aimed at helping Chinese companies like Huawei and ZTE, Chinese Foreign Ministry spokesman Geng Shuang said, "Foreign companies are also welcome to participate in the 5G development".

Since previous year, 5G trials have been conducted in Chinese cities ahead of plans to deploy the technology across the country in 2020, and now the government has given the green light. China Mobile also pledged to cover 40 cities with 5G.

Miao Wei, MIIT minister, was quoted by state media as saying that China welcomes foreign companies to actively participate in the construction of China's 5G market and share benefits generated by technological progress.

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China's 5G push will help Huawei. The government also cited data from the China Academy of Information and Communications Technology predicting that Chinese wireless network operators would spend up to $223 billion between 2020 and 2025 building 5G networks.

Earlier this year, China Telecom announced that it had live trialled out 5G in 17 cities.

The Chinese government's acceleration of 5G licensing is probably aimed at ensuring carriers do not weaken plans to build as many as 110,000 5G base stations, assuming Huawei can deliver the necessary equipment using component inventories, Mr Edison Lee and Mr Timothy Chau, analysts at Jefferies, wrote in a note on Wednesday to clients.

Huawei will get a huge boost from China's 5G expansion as it will get to sell its 5G equipment to carriers.

Huawei has become a central part of a US-China power struggle which started out in trade, and is now being played out in the technology sector.

"We remain concerned that if the USA export ban on Huawei remains in place for some time, and is even extended to other Chinese tech companies, it will be very hard for China to build 5G in scale", Wall Street research firm Jefferies wrote in a note to investors and reported by Reuters.

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