Start of 4-player battle in China's telecom market on the way
China's multi-billion dollar 5G market is shifting from a trio-game into a four-player battleground, after the Ministry of Industry and Information Technology allowed China Broadcasting Network Ltd to engage in the construction of a network for the fifth-generation mobile communication technology.
The ministry confirmed to China Daily on Wednesday that it has greenlighted CBN to build 5G networks, which will allow it to grab a spot in a market long dominated by the nation's big three mobile carriers－China Mobile, China Unicom and China Telecom.
Sources close to the ministry said CBN, the builder and operator of China's cable TV network, is now officially applying for a 5G license and the company has an inherent advantage in 5G, given its abundant spectrum resources.
"Spectrum bands are as important to mobile carriers as land is to property developers. It is crucial to have wide spectrum bands to ensure a good mobile network experience," said the sources who declined to be named as they are not authorized to speak about the matter in public.
CBS became China's fourth telecom operator in 2016 after the ministry issued a basic telecom business license to it, permitting the company to operate internet data transmission business and domestic telecommunication infrastructure service business.
But partly because 4G network construction was already well underway in 2016, CBN has, so far, never started offering mobile tele-com services, said Xiang Ligang, CEO of telecoms industry website Cctime.
"The era of 5G will be the real beginning of a four-player battle in China's telecom market," Xiang added.
On Wednesday, shares of companies in China's cable TV network industry surged. Shanghai-listed Shaanxi BC & TV Network skyrocketed by the daily limit of 10 percent to 6.57 yuan (94 cents).
Chinese companies are scrambling to commercialize 5G, a technology that is expected to be at least 10 times faster than 4G and will support superfast movie downloads, the streaming of virtual reality games, and self-driving cars. China Mobile, China Telecom and China Unicom are all conducting 5G tests in a string of cities, preparing for large-scale precommercial use next year.
China is expected to have 576 million 5G users by 2025, or more than 40 percent of global consumption, according to a report released by global consultancy EY.
A report by the China Academy of Information and Communication Technology also forecast that 5G will drive 6.3 trillion yuan of economic output in the nation by 2030.
Fu Liang, an independent telecom analyst, said CBN's entry into the market is a step to increase competition and promote the "three-network convergence," a State-advocated project aimed at merging telecom, television and internet services into a single network.
"Moreover, telecom businesses will inject a new momentum to CBN, whose cable TV business has suffered a lot from the popularity of internet TVs," Fu said.