Chinese telecom operators cautious about investments in 5G

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(Image credit: China Unicom)

China’s three major telecommunications network operators are cautious about investments in 5G infrastructure, as revealed by the companies’ 2018 annual results.

The combined spending of China Mobile, China Unicom, and China Telecom is expected to reach RMB 286 billion (around $43 billion) in 2019, while their aggregate investment in 5G is estimated to be less than RMB 34 billion.

The numbers show that the three giants of China’s telecom industry are cautious about their investments in 5G, given that the country is determined to become the world leader in 5G technologies and roll out 5G for commercial use in 2020. By comparison, the total investments will need to reach RMB 1.23 trillion in order to build China’s 5G networks, according to China Securities International.

China Mobile said that the company would continue to conduct 5G network tests and perform trials on business applications to ensure the pre-commercial launch of 5G services this year.

The company plans to spend the most among the three operators in 2019, with a capital expenditure of RMB 149.9 billion. China Mobile didn’t reveal its budget for 5G but stated that it wouldn’t be more than that of 2018, which amounted to just over RMB 17 billion.

China Unicom’s spending for this year is expected to reach RMB 58 billion, with up to RMB 8 billion being invested in 5G networks.

“The right time is yet to come when we have to massively invest in 5G,” China Securities Journal quoted Wang Xiaochu, chairman of China Unicom, as saying. He added that 5G technology is still in its exploratory stage.

China Telecom will allocate RMB 9 billion to 5G networks from its RMB 78 billion capital expenditure for 2019. The company expects to build around 200,000 5G base stations by the end of 2019.