China’s 5G investments may be slowing

While China is certain to be one of the world’s largest 5G markets and has been spending heavily to gain an early lead in 5G adoption, there are signs that 5G momentum is slowing down in the market.

This was one of the conclusions of a new report from IDTechEx Research on the 5G technology market forecast for the next 10 years.

The report found that China’s big three operators China Mobile, China Telecom and China Unicom have all announced 5G capex budgets that are lower than expected.

China Unicom plans to spend between 6 billion yuan ($893.3 million) and 8 billion yuan on 5G in 2019, while China Telecom has allocated 9 billion yuan. While market leader China Mobile has not disclosed its projected 5G spending, the report forecasts that its spending will be in the region of 17 billion yuan.

The total 5G capex budget allocated in China (34 billion yuan) for 2019 is therefore significantly lower than the projected 50 billion to 100 billion yuan.

Factors behind the lower than expected spending include greater activity to upgrade 3G networks to 4G, falling per-subscriber revenue and the uncertainty over whether 5G investments will generate returns, the company said.

Based on slower than expected 5G deployment schedules, the total contribution of 5G for the telecoms sector could be reduced from the projected $200 billion by 2029 to $160 billion.

But operators are projected to invest around $200 billion to $350 billion for 5G development from 2020 to 2030.