China’s 5G Said To Be Facing Technical Constraints That May Slow Down Its Rollout

The next big thing in the tech industry is, no doubt, 5G technology. The race has been on between China and the U.S on who will be the first to roll out the technology. From the look of things, China has the upper hand and was billed to officially roll out its 5G network in Q1 2019. That may not happen soon as a report by US investment bank Jefferies says China’s next-generation 5G mobile network could be pushed back due to technical constraints. The report also cited signs of a more “rational view” by Beijing as another reason why the rollout may be delayed.

Jeffries reports that analysts have cut forecasts for China’s overall 5G capital expenditures (capex) by 8% or 57 billion yuan ($8.49 billion) in 2020 to 2022 and pushed expectations for peak capital expenditure out to 2023 from 2021 to 2022 in a recent report that re-evaluates 5G timing and rollout following a critical development in December. The Chinese government has already allocated radio frequency spectrum to China’s three telecommunications companies. This will enable the companies to embark on final trials before wide commercial implementation will commence in 2020. This action has spurred a round of financial re-assessments. Other factors that could play influential roles in the forecasts changes include recent 2G re-farming indicators as well as signs of moderating mobile data price pressure from the government.

Equity analyst Edison Lee stated in the report that even though the Ministry of Industry and Information Technology (MIIT) placed “accelerating 5G” as a top priority, the rollout will likely not happen as quickly as expected due to “the likely lack of a range of affordable 5G handsets and attractive applications (both consumer and industrial).”At the moment, just a few OEMs have launched their 5G-enabled smartphones in China. Although a couple more 5G smartphones will hit the China market before the year runs out, we expect 5G to pick up the pace from next year. So, you may want to hold on for now if you’re thinking of emptying your wallet for a 5G phone.―Gizmochina