Chinese telecoms firm to double spending on 5G research

As China races to implement 5G coverage before the US, Chinese telecoms provider ZTE has pledged a research spend of $295.5m a year

  • By Rachel Connolly | Friday, June 30th, 2017

5G connectivity will transform internet use, making the Internet of Things a practical option for everyday life

In an indication of China’s determination to lead the world into the next phase of connectivity, telecoms giant ZTE Corp has announced it will double spending on research into fifth-generation mobile network (5G).

The firm now plans to spend at least $295.5m on 5G research every year, and said it would consider ramping investment up even further to assist China’s aim of having a 5G network up and running by 2020. The US is also investing heavily to develop its own 5G network.

5G development is still so far back in the pipeline that there is not yet an international standard for what coverage will look like

The 5G network will provide significantly faster data transfer than current 4G coverage, delivering a marked speed improvement for internet users, but the real business case for 5G lies in the Internet of Things. Tech companies are increasingly focusing development on smart electronic home appliances; these will need constant, very rapid internet connections to function and communicate with each other. Some estimates suggest the rate of the technology boom is such that there will be 50-100 billion devices by 2020, and 5G will be essential to powering them.

5G development is still so far back in the pipeline that there is not yet an international standard for what coverage will look like, but some standards for speed and efficiency have been agreed. The speed upgrade of 5G would allow even a full HD film to download in seconds, and do away with patchy network coverage, giving users the perception of limitless bandwidth and continuous availability.

Building the infrastructure required to support a 5G network is one of the most costly challenges associated with getting it off the ground. The super fast internet of 5G will be facilitated by higher frequencies than those currently used, but since these are more easily blocked by trees and buildings, a network of base stations will have to be built to avoid gaps in service.

Both China and the US are committed to meeting the initial costs of 5G to reap the benefits later, and a recent research paper by the Ministry of Industry and Information Technology forecast China’s cumulative 5G capital spending is expected to rise to $243bn by 2025. Not to be outdone, the US will spend between $130bn and $150bn over the next five to seven years in fibre infrastructure alone, to get its own 5G network up and running, a study by Deloitte earlier this month found.