China’s Ministry of Industry and Information Technology (MIIT) has officially issued licenses for the launch of commercial 5G networks in the country.
The 5G permits were granted to state-run carriers China Mobile, China Unicom, China Telecom and state-owned broadcaster China Broadcasting Network.
At the end of last year, the MIIT had previously issued licenses for 5G trials in a number of cities across China.
Commercial rollout of 5G in China was initially expected to occur during 2020. However, the decision by the government to accelerate 5G deployment will trigger investment in the Chinese market, which would benefit Chinese vendors, especially Huawei, whose business could be affected by an export ban recently implemented by the U.S government.
Huawei said in response to the license grant that it was ready to support China’s 5G rollout. The vendor said it had already inked 46 5G commercial contracts in 30 countries, shipping more than 100,000 5G base stations.
ZTE also said it is prepared for the commercialization of 5G technology in China.
“With complete 5G end-to-end solution capabilities, ZTE is fully prepared for the commercialization in wireless, core network, transport, chipsets, mobile devices and industry applications,” the vendor said in a statement. “ZTE has been proactively participating in the commercial deployments and construction of 5G networks in China, and will work closely with industry partners to actively promote the application of 5G services.”
China Mobile, the world’s largest operator in terms of subscribers, said it planned to offer 5G services in more than 40 Chinese cities before the end of September.
In a statement, the MIIT also said that foreign vendors were also welcome to participate in the rollout of 5G technology in China. Nordic vendors Ericsson and Nokia had previously said that they had interest in securing contracts in the Chinese market for the deployment of 5G.
According to the China Academy of Information and Communications Technology, the country will invest between $134 billion and $223 billion in 5G between 2020 and 2025, generating an economic value as high as $3.7 trillion, with operators realizing some $283 billion in attendant revenue.
However, some analysts believe the rollout of 5G in China will face some challenges due to the U.S. ban on Huawei.
“We remain concerned that if the U.S. export ban on Huawei remains in place for some time, and is even extended to other Chinese tech companies, it will be very difficult for China to build 5G in scale,” U.S financial services firm Jefferies said in a note. “The action by China to accelerate 5G licensing does not remove or alleviate this risk.”
Last month, the Trump administration confirmed that the U.S. Department of Commerce added Huawei to its Entity List, a decision that effectively banned the company from buying parts and components from U.S. companies without U.S. government approval. Under the order, Huawei will need a U.S. government license to buy components from U.S. suppliers.
However, since then, the administration announced that it would ease certain export restrictions recently imposed on Chinese vendor Huawei Technologies, in a move to give operators time to make other arrangements.