China Will Be Relentless in Struggle With U.S. to Dominate 5G: CSIS Expert

China’s focus on 5G is tied to that nation's desire to “reclaim” what it believes is its “rightful place at the center of the world,” said James Lewis, Center for Strategic and International Studies senior vice president, at the Hudson Institute Tuesday. Lewis also warned the U.S. may not be keeping up with China headed into the World Radiocommunication Conference, which begins Nov. 20. Lewis was interviewed by Harold Furchtgott-Roth, Hudson senior fellow and former FCC commissioner.

The Chinese have complained about American dominance in wireless for more than a decade, Lewis said. The Chinese are “displeased with what they perceive as American hegemony, and that hegemony includes technological hegemony,” he said. The Chinese believe the U.S. builds “back doors” into the chips it sells to China, he said. “It’s not true, but it’s nice they think that,” he said, noting the competitive jockeying with China.

The U.S. system has set the model for the world since World War II, but “that’s fraying if not disintegrating,” Lewis said: “The Chinese wish to replace it.” If the U.S. wants a world focused on rule of law and human rights, it has to be economically successful and that’s why 5G is so important, he said.

At the WRC, seven major items are in contention and “right now the Chinese have positions on six -- they’re going around busily lobbying the rest of the world to support them,” Lewis said. The risk is that with Huawei products excluded from many networks, providers will have to use Huawei anyway “because the spectrum devices they use will be dependent on Chinese standards and Chinese thresholds,” he said. “I don’t know if we’ll fix this one,” he said.

The U.S. tends to go “right up to the edge” of being unprepared for a WRC, Lewis said: “Somehow we always manage to pull it off at the end. I’m hopeful that will happen, but this is the closest we have come to the edge without being ready.” Congress needs to restore FCC auction authority and policymakers need to decide which bands will be used for 5G, he said. “Either we’ll build the devices or the Chinese will,” he said.

3G was probably the most important wireless generation, still used in much of the world, Lewis said. 4G brought the smartphone and the app economy, the use of phones as boarding passes and for more than communications, he said. “5G is aimed at enterprises,” and “at commercial activity,” factories and hospitals, and isn’t “consumer-centric,” he said. 5G won’t mean just faster video downloads, he said. Technology is moving faster than ever, Lewis said: “Our ability to make noise about it has also increased, but our ability to understand it perhaps not so much.”

“We are now firmly in the 5G era if we look at network deployments and 5G mobile services adoption,” said Christina Patsioura, GSMA lead analyst-IoT and enterprise, during a Mobile World Live webinar Tuesday. As of Q2, 238 operators worldwide have launched 5G, including 14 with 5G stand-alone (SA) networks, she said. Half the networks offering 5G are in the Asia-Pacific region, including all providers in China, she said.

So far, 93 operators have announced plans to offer 5G SA networks, Patsioura said. “Slowly but steadily, 5G SA is gathering momentum,” she said. Operators are also making progress in adding business customers, with the share of revenue at 31%, she said. “The enterprise segment represents an incremental opportunity to monetize 5G deployment,” she said: “This is because 5G networks are costly, they require investments and traditional telco revenues have been staying flat.”

Almost half the deployments of private networks in the manufacturing and warehousing sectors are now 5G, said Shaun Collins, executive chairman of analysis firm CCS Insight, at the Global Mobile Broadband Forum Tuesday: “We see that as being a very realistic and exciting part of where 5G can offer the greatest value.” Healthcare doesn’t top the charts, but has been one of the fastest growing areas, he said.

“Although we’re a maturing market in 5G we’re still very early on in some of these deployments,” Collins said: “5G in a box doesn’t really exist yet.” To be able to deploy a private network at scale, drive the costs down and make money “is a little while away yet,” he said.