While investors worry about the slow growth of shipments of Apple and other smartphone makers this year, the sector is busy testing the next-generation mobile communications technology.
Several countries, including South Korea, China, the United States and Japan, are expected to launch the commercial operation of 5G mobile telecommunications networks next year. In Hong Kong, the government plans to host a 5G spectrum auction next year with the service expected to be rolled out in 2020 at the earliest.
Telecommunications equipment vendors are also busy negotiating with mobile operators around the world to secure 5G-related contracts, which will be a big boost for their business as the new networks will need far more equipment than previous generations of mobile technology to make them suitable for both people and devices.
Chinese telecommunications equipment makers are competing with their European peers for the lucrative business, even though several developed markets have banned Chinese suppliers like Huawei Technologies on national security concerns.
Despite the enormous challenges, Huawei has been able to forge ahead. The Shenzhen-based company announced on Wednesday that it has signed 22 commercial contracts for 5G network deployment with telecom operators worldwide.
Huawei executive director and president Ryan Ding also said the company is working with over 50 carriers on 5G commercial tests. He did not reveal the names of the 5G clients.
Ding said the 5G contracts are a reflection of customers’ strong recognition of Huawei’s leading 5G end-to-end capabilities and innovative products and solutions.
Huawei is facing a ban as a supplier of 5G network equipment in the US, Australia and Germany. Some of these countries fear that the company has strong connections with China’s military, which may lead to unauthorized network access or interference.
The company denies any links with the Chinese military, adding that it has never been asked to engage in intelligence work on behalf of any government.
Despite the security concerns, 5G appears headed for a good start.
Developed markets are among the first to deploy 5G in a bid to tap new business opportunities from the Internet of Things and other emerging applications.
Ericsson said major countries, which represent one-third of the global population, would give 5G a much larger scale than the first waves of commercialization involving 3G and 4G technologies.
The Asia-Pacific and North America will be the early adopters of 5G. One of the biggest contracts being awarded is from T-Mobile US. The US mobile operator announced in September that it had granted a US$3.5 billion multiyear contract to Ericsson to support its nationwide 5G network deployment.
Under the deal, Ericsson will provide T-Mobile with the latest 5G New Radio (NR) hardware and software compliant with 3GPP standards. AT&T also selected Ericsson, Nokia and Samsung for the 5G network deployment.
The US, not a first mover in 3G and 4G, is taking a lead in 5G deployment in a bid to win back its market-leading position in terms of mobile technology development.
In China, the government also aims to roll out its 5G network next year in order to keep its leadership position in the mobile technology field, especially in light of its trade war with the US.
Interestingly, the nation’s state-owned mobile operators – China Mobile, China Telecom and China Unicom – have signed deals with European suppliers to build new network infrastructure that would allow them to easily upgrade to 5G technology.
In November, Nokia announced that it has signed three separate framework agreements worth more than 2 billion euros (US$2.28 billion) with China Mobile, China Telecom and China Unicom. Under the agreements, Nokia will deploy technologies and services to improve the performance of China’s fixed and mobile broadband networks across China to meet the ever-growing demand as operators transition towards 5G.
While the deal does not necessarily involve the sale of 5G equipment, Nokia will assist operators to accelerate the 5G layout in the future.
With the newly built network ready, consumers need smartphones or other devices to enjoy the service. Some market observers speculate that mobile phone brands may launch 5G foldable phones that will create whole new experiences for users.
Leading phone makers, including Huawei, will launch budget phones (priced around US$100) soon after the commercial roll-out of 5G networks, driving the 5G industry forward.
The Huawei executive said recently that the company is testing an affordable 5G smartphone which will be launched early next year. Based on its track record, Huawei is likely to launch its P series flagship in the first quarter, and its first 5G smartphone sometime next year.
The new 5G technology will provide users gigabit transmission speed and much more network capacity. It will bring us to a connected world, into an era of self-driving cars, talking refrigerators and intelligent devices.
It’s time to prepare ourselves for this new technology that will radically change our lives.
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