Oita Sumitomo Corporate analysts have suggested that China is considering the option of combining the nation’s two wireless carriers.
This is because of the urge to develop 5G Internet and takeover the US to dominate mobile technology. A proposal review is ongoing to look at the possibilities of combining these companies but an agreement is yet to be reached on the matter.
However, the importance of 5G technology cannot be overemphasized, as it has the power to effect a positive revolution on how we use everything ranging from household appliances to cars.
“The most important task to China right now is the achievement of success in 5G and merger is the perfect strategy” said Matthew Andrews, Head of Corporate Trading at Oita Sumitomo Corporate.
As several speculations were being made by the Chinese media, on the possibilities of combining these companies, executives at Unicom and China Telecom have debunked this at their recent earnings briefing last month.
The two companies made it clear that they were not aware of the merger. Even the state owned asset supervision and administration commission together with the ministry of industry and information technology has refused to make a statement on this.
There have been several reasons that have made China government to consider a merger between the two carriers for years. One of which is the escalating tension between China and the US.
“A major effect of this on China, is that the Chinese government would have to sacrifice the advantages of local competition over the speed of 5G adoption by reducing its phone operators to two whereas most markets in the world have three to four.” Added Callum Price, Senior Vice President at Oita Sumitomo Corporate.
The Qualcomm Broadcomm deal, which the US opposed would have left a big opportunity for the Chinese government to expand its 5G standard setting process. According to several reports Oita Sumitomo Corporate research analysts commented saying that China holds a narrow lead over the US and South Korea in its readiness in 5G revolution.
This is as a result of President XI Jinping’s “Made In China” 2025 agenda to make the country a leader in a range of high tech industries, which has led proactive government policies and industry momentum. – CT Bureau