June 6, 2019 can be reasonably regarded a milestone in China's telecommunication history. On that date, the Ministry of Industry and Information Technology issued 5G commercial licenses. This made the year of 2019 the beginning of the 5G era in China – one year ahead of China's original plan.
Pre-commercial services had been expected in 2019, but scaled commercial services were not expected until 2020. The industry in China was therefore expecting 5G commercial licenses in 2H19 at the earliest. Clearly, the government pushed the fast-forward button.
Now, 5G development has accelerated. Operators refreshed their 5G development plans after acquiring their licenses, with announcements to offer 5G commercial service this year. Meanwhile, they have all begun promoting their 5G brands, and are positioning to launch commercial services. 5G standalone operation will start rolling out in 2020.
Why the rush? In Asia, we are starting to see a growing push by governments to accelerate 5G rollouts as a means of promoting industry development – specifically, to promote the efficiency benefits of IoT automation and to bring forward the development of the "new industry use cases" that we have been promised from 5G.
In some cases, operators need little encouragement. South Korea operators were arguably the first (along with Verizon) in the world to launch commercial 5G at 3.5GHz. The government did attempt to encourage infrastructure sharing by tightening access rules for mobile backhaul, but this has had little impact on the speed of rollout, as all operators have extensive fiber networks.
The case of Singapore is more interesting. 5G spectrum licenses have not yet been issued. The regulator, the IMDA, is conducting a public consultation on its proposed model: only two 5G licenses in a market of four operators, designed to encourage infrastructure sharing that will reduce rollout costs and accelerate coverage. It has also proposed to forbid non-standalone networks in order to bring forward the full capabilities of the 5G core network.
This all reflects the importance of industry development imperatives in Asian communications regulation. In Singapore, this linkage is explicit: the IMDA is both a communications regulator and an industry development authority. In places like China and South Korea, the linkage is not quite as explicit, but is important. This is a different way of doing things compared to North America or Europe, where spectrum allocation and industry development generally occur at arm's length. However, it is foolish to underestimate the capacity of Asian societies to implement rapid and comprehensive technology change in the telecommunications industry. They have done it before with FTTx.
In particular, China already has about half of the world's M2M cellular connections. We'll know in the next five years whether their breakneck 5G pace has proven more wasteful than useful. However, it is also possible that they will lay the foundations for a growing dominance of global IoT activity. In the current geopolitical situation, that may have long-term economic effects we cannot yet anticipate.
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